New Credit Card Legislation Filled with Loopholes
So you think you are fully protected now that the new Credit Card Accountability Responsibility and Disclosure Act of 2009 has taken effect.
Think again.
The new law, which essentially requires credit card companies to end unfair and deceptive practices, was enacted by Congress to be a savior to credit card-weary customers. However, the new laws have their share of loopholes; loopholes that credit card companies are quick to take advantage of.
In short, there is simply no law that can fully protect consumers from deceptive credit card practices.
- For example, the new law doesn’t prohibit credit card companies from charging outrageous fees. In fact, the law does not cap interest rates at all. Credit card companies are also permitted, under the law, to cancel a credit card at any time.
- Credit card companies are also permitted, under the new legislation, to impose new fees and even charge more for fees currently in place. In other words, your credit card company is still permitted to raise everything from cash advance to account transfer fees.
Although there are plenty of positive aspects of the current credit card legislation, unfortunately there are just as many negative aspects of which consumers need to be made aware.
- One of the new charges that credit card companies are imposing, likely as a result of the credit card legislation, is a credit card inactivity fee. This fee, which can be as much as $36 per year, is charged by the credit card companies when you don’t use your credit card enough.
Still, other credit card companies have begun charging their customers for everything from paper statements to foreign transactions.
- Did you also know that credit card companies can also charge a “minimum finance charge?” Yep, that means, regardless of how small your balance, your credit card company can charge you a minimum fee.
- Many credit card companies are also bringing back annual fees.
The bottom line is that it is up to you, the consumer, to continue to monitor you credit card statements very carefully and to always, always take the time to read the terms and conditions of your credit card.
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