Will contactless payments make a comeback? Visa recently announced that it will extend its signature waiver to most retailers starting now. What this means is that consumers who pay less than $25 with their card will not require a signature for the transaction. This should help drive people to want to wave a contactless card in front of a card reader and not have to bother with a PIN pad. Merchants like the fact that PIN transactions cost less for them, but they don’t like how it takes longer to checkout. Signature transaction costs are coming down now, in the wake of changes in credit card laws.

Merchants will like it because anything that speeds the checkout process reduces costs. Best Buy decided that swipeless transactions cost them too much because they had to run over the signature-network, and so they discontinued that program.

However, consumers are a  bit concerned about security. How does it work, they ask?  Me I’m ready to get a new swipeless debit card with this technology.

Prepaid cards are basically debit cards where you put money on it up front. You don’t need a checking account, and your credit can be shot to pieces like mine. However, you can still get one of these cards. The companies that offer them don’t care about your credit, because you are prepaying, so there is no risk to them. For you, you get to slap down the plastic with a Visa or MasterCard logo and impress the girls. My girl actually prefers pink cards. Pink is the color of her true card. It is pink and has a picture of a cow on it. I think she even designed it herself on line.

Did you know you can design your own stamps at the post office now? It’s true. You have to pay a little and go to stamps.com but then you can have your kid’s picture on a stamp. Technology is a wonderful thing. I would like to design a Bill Clinton stamp because Monica Lewinski aside he was a great president. He’s doing good things in Haiti these days. Him and George senior.

My next favorite color for a credit card or debit cars is fire engine red. It makes a statement.

Why? Well, if you think about it, what is to stop a band from trashing their hotel room, breaking lamps, vomiting on the carpeting, or stealing the TV. At least if the hotel has a credit card on file, it has a way to recover its losses. What is true for a rock band is true for an individual. So, when you give them your card, odds are they put a hold on it for a few days, sometimes as much as $500, but often just the equivalent of one night’s lodgings.

Bear in mind if you are checking in using a prepaid card, they will do the same thing. They want a deposit to secure the room, and you better have enough money on your card to cover this (temporarily) or your prepaid card will be rejected. Now, often this is not convenient because of the nature of prepaid cards and the people who have them. If you don’t have enough money on the card, you won’t go overdrawn but rather the card will be declined. Oh huh. Then you have to give the desk clerk a pile of cash as a deposit on the room. When you leave, they will give you your cash back.

Penalty fees will come down. If you miss a payment your late fee might be as high as $39 today, and it wouldn’t matter if your minimum payment was $20 or $300. However, come August 22, the worst you would pay in a late fee is $25.  They only way you would pay more (Says the Government):

• One of your last six payments was late, in which case your fee may be up to $35; or
• Your credit card company can show that the costs it incurs as a result of late payments justify a higher fee.

What’s more, your credit card company can’t charge you a late payment fee that is greater than your minimum monthly payment. Also, if you go over your credit limit, your card company can’t gouge you.  I think the maximum over limit fee is $5.

Some more protections from fees

The company cannot charge you an inactivity fee for not using your card. I can’t believe they ever got away with that to begin with.

Credit card companies will no longer be able to charge you multiple fees on any single event or transaction that breaks your cardholder agreement.  So no longer can you get double dinged for a single late payment.

Need to explain any rate increases

You’ll have more advanced warning about Annual percentage rate (APR) increases and if they do raise it they have to tell you why. They need a good reason.

Recent rate increases?

No longer will your credit card company be able to raise your card’s APR with no obligation to re-evaluate your rate increase. So if you improve your credit rating for instance, they have to take a look at that and hopefully lower your APR.

In fact under the new rules if your credit card company increases your APR, every six months it has to  re-evaluate that rate increase and if it you pass that evaluation with improvement, your card company should have to reduce your rate within 45 days

The Credit Card Accountability, Responsibility, and Disclosure Act is a good thing, and will help consumers in the teeth of one of the worst recessions since the Great Depression.