Credit Card Quick

How to Protect yourself from the Credit Card Legislation Loopholes

Introduction

It is no secret that credit card companies are looking for ways to make money given the new credit card legislation. As a result, many credit card companies have found quite a few loopholes in the new legislation; loopholes that you may not be aware of and loopholes that can cost you big.

There are, however, a number of things you can do protect yourself, even given the loopholes being enacted by credit card companies:

• Look closely at your credit card statement each and every month and take note of any changes in your credit card’s terms and conditions. The CARD act requires that credit card companies must notify you 45 days in advance of any credit card changes, thereby providing you with the opportunity to find another credit card or close your account. Remember: credit card companies can charge all the fees they want, but in the end it is up to you as to whether you will accept these fees or not.
• Regardless of what you have been told in the past, if you don’t like the terms and conditions of your current credit card, cancel the account and find another one. The small hit you may take on your credit score due to a closed account will be minor, so get rid of the unwanted card and make a better choice. It is important to close any accounts that you no longer use, as you will likely incur inactivity fees as a result inactive accounts.
• To find the most competitive credit card, check out popular bank, credit card, and lending websites. These websites compare all of the latest credit cards, side by side, so can shop for a new credit card in one place. In addition, don’t forget to check out credit cards through your local credit union or bank; often times the interest rates charged by these local institutions are quite attractive and competitive.

It is important to remain in charge of your financial future, and the only way to accomplish this is to remain educated, informed and aware.

Why the New Credit Card Legislation may not be all it’s Cracked up to be

News

February 22^nd is the magic date when all of the credit card legislation that was passed through the Credit Card Accountability Responsibility and Disclosure Act (CARD) must go into effect. That means that all of the credit card companies must comply with the new terms set forth in the CARD Act.

Although these changes are designed to help consumers better manage their debt and to discourage credit card companies from operating under false pretenses, it doesn’t mean that you can forget about fees and hiked interest rates.

The bottom line is that you still must be a responsible consumer; it does not give you a free pass to spend as you like without consequences.

In addition, don’t assume that just because the government has reigned in the credit card companies on certain points doesn’t mean that they can’t then conjure up new traps in which to catch consumers.

The Fine Print

Most of us are conditioned to simply discard the legal mailings we receive from our credit card company about our credit card’s terms and conditions. However, we must begin to change our way of thinking because the credit card legislation doesn’t deny the right of the credit card company to raise interest rates or impose fees; it simply states that they must warn credit card customers ahead of time.

For example, your credit card company can raise your interest rate on future purchases at any time, but they must also give you a 45 day warning. If you fail to read this fine print in your contract, your credit card company could potentially raise your credit card’s interest rate and you will be none the wiser; that is, until your receive your first credit card statement with a large finance charge.

Fixed-Rate vs. Variable Rate

Another trick that credit card companies have up their sleeves is to turn fixed-rate credit card accounts into variable-rate accounts. This is because the credit card legislation only covers fixed-rate credit cards. In other words, the creditor is free to increase your credit card’s interest rate at any given time if it is a variable-rate account.

The bottom line is that we all have to become better advocates for ourselves and to make it a point to understand all of the terms and conditions associated with our credit cards.

How Will the New Credit Card Bill Affect Creditors and Consumers?

News

The new sweeping regulations on credit card practices recently signed into law by President Obama has many credit card customers jumping for joy.

Learning from Past Mistakes

In past years, credit was flowing freely and creditors were more than anxious to lure consumers in with promises of teaser rates, gimmicks and reward programs. Many of us took the bait and began charging to our heart’s content.

Fast forward to 2009 and things don’t look quite so rosy anymore. Many of us now find ourselves in quite a precarious position; the economy is in a recession and our credit card debt is piling high as creditors dramatically raise our interest rates and add over-the-top fees. Not only are many of us unable to pay down our credit cards, but some of us are simply unable to keep up with the payments and fees.

New Changes Underway

The new credit card bill, which is due to go into effect July 1, 2010, is designed to come to the rescue of the millions of Americans bogged down in credit card debt and unable to get out from under it. But will this new law affect the way creditors lend out money?

Perhaps. We may see fewer promotional rates, fewer rewards programs, higher interest rates and tougher credit criteria, particularly for those with a short credit history. But in the end, credit card companies are still a business, and for those of who have worked hard to maintain our credit, credit will still be available. In fact, competition among creditors will still exist, thereby providing consumers with excellent credit plenty of options regarding credit cards.

In addition, the new law requires that credit card companies must provide cardholders with notice of a rate or fee increase at least 45 days ahead of time, thereby enabling consumers to make a change, if desired.

The bottom line is that the new credit card laws will put the responsible credit card consumer back into the driver’s seat, and will prohibit credit card companies from imposing certain practices that will only leave credit card customers in a no-win situation.

Details of the New Credit Card Bill

News

President Obama recently signed the Credit Card Accountability, Responsibility, and Disclosure (CARD) Act, which will protect credit card customers from outrageous fees and skyrocketing interest rates.

The CARD Act is designed to take control of out-of-control credit card practices that have left many credit card customers in over their head and unable to find their way out.

The CARD Act, which takes effect on July 1, 2010, will regulate the practices of many credit card companies of raising interest rates and imposing fees that have left many cardholders simply unable to reasonably repay their debts.

Highlights of the New Credit Card Bill

Within the guidelines of the new credit card bill, a creditor may only raise a cardholder’s interest rate after he or she has been more than 60 days delinquent. The creditor must then reinstate the cardholder’s original interest rate after he or she has made payments on time for six months.

Another positive feature of the CARD Act is that creditors may not raise a cardholder’s interest rate during the first year on a new or existing account unless the interest rate is variable, or if the cardholder fails to make a payment within 60 days of the due date.

Other features of the bill include: limiting over-the-limit fees; providing cardholders with a reasonable amount of time to make a payment; putting any monies which exceed the minimum payment toward the higher interest debt on the same credit card; eliminating two-cycle billing; and providing cardholders with a 45-day notice of a interest rate increase.

The CARD Act is a positive law for trustworthy, responsible credit card holders who consistently pay their bills on time.

Most of us have been in a situation where we missed the due date for a credit card or fell on bad luck and were not able to make a payment by the due date. With old credit card practices, most creditors would automatically raise our interest rates dramatically, thereby causing many of us to simply be unable to pay down our credit card debt.

The CARD Act will protect responsible credit card holders and enable consumers to be better equipped to handle their credit card debt and pay it off in a reasonable amount of time.