The new era of credit card regulations are upon us and banks are scrambling to try and protect the $20 Billion dollars in overdraft fees they collect from Americans every year.  This cash cow is now in jeopardy thanks to the CARD act reforms.  According to the new law, banks must now get permission from consumers for them to OPT IN to overdraft protection. 

The big sweeping credit card reform CARD ACT is finally upon us.  Well the credit card industry has been hard at work figuring out how to maintain their profitability in spite of this new legislation.  There are several things worth noting in this new era of regulation for the credit card industry.

First, the good news:

People have struggled with debt for a long time. Credit card companies have made record profits by making their credit available to millions of people. I liken them to any other vice. If you get hooked on them, they are a difficult habit to break. My company has helped people with debt for many years. We have gone to companies and gave seminars on our debt elimination system, taught debt elimination through community education, and many other continuing education venues. Invariably we would see the same thing over and over. Some people are ashamed of their debt and want to do something, but are afraid of the social stigma of being seen as someone who cannot manage money. This would affect attendance. You would get a certain number of people signing up for the seminars, but half of them would actually show up. Where were the other half? They would avoid the class, even though they paid for it, for fear of being embarassed.

Average Americans are Under More Pressure Than Ever

I have lived on this planet for almost 50 years and cannot think of a period that is more economically challenging for average Americans than right now.  Just think about some of the financial pressures being put on people:

• Gasoline at $4.00 per gallon
• Housing Values declining 20-30%
• Stock Market declining
• Average wages stagnated or declining in a shrinking job market                         

Typically any one of these factors would make the economic climate challenging, but all these factors combined are teaming up to create the perfect financial storm.