Credit Card Quick

How to Always Win at the Credit Card Game

Introduction

The Credit Card Accountability, Responsibility and Disclosure Act (CARD) that was enacted into law in May 2009 has accomplished what so many consumers had been hoping for over the years: to make credit card companies become more transparent and to eliminate certain credit card practices that were less-than-fair.

However, in response to the CARD Act, and perhaps because many credit card companies cried foul because some of the changes in the legislation meant that they were losing money, creditors began finding ways around the legislation. Therefore, many consumers were left even more confused than before the CARD Act was even enacted.

If, after all of the changes enacted by credit card companies, both to adhere to the new CARD Act guidelines and to avoid losing a great deal of money, you are still quite confused, then it is up to you to engage in a number of activities that will, regardless of what legislation is passed, protect you and make you a winner at the credit card game.

• Always pay your bill on time – OK, so this sounds rather obvious, but the fact is that many consumers still fail to do this on a regular basis. The truth is that creditors cannot charge you any kind of fee if you pay your bill on time. They can’t change your credit card interest rate and they can’t charge you any late fee. The best rule of thumb is to set up automatic payments through your bank so that you can be assured your credit card bill is paid on time, each and every month. If you pay your bill in full each month, set a reminder on your desk calendar or smart phone.
• Don’t reach for the convenience checks – Creditors love to send out those tempting little advance checks, also known as convenience checks. But you must be strong and send them to the shredder, as they are riddled with all kinds of fees and higher interest rates, and they are not protected by the CARD legislation. In short, there should never be a time when using convenience checks are OK.
• Read any material that is sent to you – Because creditors must inform consumers of any changes to their credit card account, you may find yourself receiving more correspondence from your creditor. Avoid the urge to toss the letters into the garbage can and instead take the time to read them so you can always be aware of any changes to your account.

Gift Cards Protected by CARD Act

Introduction

The Credit Card Accountability, Responsibility and Disclosure (CARD) Act is set to go into effect soon. Through the CARD Act millions of consumers will begin to enjoy better disclosure from their credit card companies and straightforward rules regarding purchases and repayments.

In addition to all of the benefits that millions of consumers will enjoy with the CARD Act, individuals with gift cards will now be covered, too.

Gift cards are an incredibly convenient and practical alternative to cash gifts and are certain to please the recipient. Now, they are protected under the CARD Act, too!

Some of the new changes regarding gift cards include:

• No inactivity charges unless the card hasn’t been used in one year – Many gift card companies would charge steep inactivity fees much, much sooner; now you can enjoy your gift card without worrying that the balance will be affected by inactivity fees.
• No expiration for a period of five years – Many gift cards in recent years would expire in as little as 13 months; now, they cannot expire unless they have not been used for five years. Now you can actually take your time to decide what you want instead of spending before the gift card expires!
• All relevant information must be disclosed on the card – Any pertinent information about the gift card, such as the expiration date, the toll-free number and any fees related to the gift card will need to be written on the gift card. Now there won’t be any second guessing when you find a gift card that you haven’t used for a while!

Other features of the CARD Act that will change the way we use our credit cards include:

• The average late fee or over-the-limit fee will change to $39.
• Credit card companies can no longer charge an inactivity fee or an annual fee. For all those credit card consumers concerned with paying fees if they don’t use their credit regularly, this part of the CARD Act will prove to be incredibly useful.
• Credit card issuers will need to evaluate rate increases every six months on anything imposed after January 2009.

Changes to your Credit Card in 2010

News

The Credit Card Accountability, Responsibility and Disclosure Act, which is set to go into effect as of February 10, has changed many of the ways in which consumers use credit cards and credit card companies handle consumers’ credit card accounts.

This new credit card legislation comes with its share of changes, most of which will take place as early as next month. The changes to the credit card industry are designed to protect consumers and hold credit card companies accountable for responsible behavior, but they may also result in more responsible behavior from credit card consumers. In other words, consumers are sure to benefit from the upcoming changes, which include:

• You credit card’s interest rate cannot be raised if you are just a few days late on your payment.  This is welcomed news to many credit card consumers who, in the past, saw their credit card interest rates soar when they missed their monthly payment by a day or two.
• The creditor can raise your card’s interest rate if you are more than 60 days late making your payment. However, if you make your payments on time for the next six months following your late payment, your creditor must lower your rate to its original APR.
• Any amount paid on your credit card bill, above the minimum payment, will be automatically applied to your highest interest rate balance. In other words, if some of your balance carries a 9.99% interest rate and another portion of your balance carries a 14.99% interest rate, your credit card company must apply your excess payment to the 14.99% balance, thereby helping you pay off your debt quicker and pay less interest on your debt.
• Your credit card company must give you at least 25 days from the closing date of your statement to make your credit card payment. Before the legislation took place, many creditors were decreasing the amount of time the cardholder had to get his or her bill paid, thereby resulting in many delinquent payments (and plenty of related fees and penalties).

Check your credit card statement and carefully read all of the enclosed terms and conditions so you can be aware of the changes to your credit card and how they will affect you.

The First Credit Card Reform Rules get Underway

News

August 20 marked the first day of the new credit card reform. Although the majority of the new laws won’t take effect until February 2010, there were a select few that made their way into the newest credit card legislation last week.

The new credit card rules, under the Credit Card Accountability, Responsibility and Disclosure Act, include: creditors must give their customers a 45-day notice of interest rate or fee increases; and creditors must allow their customers at least 21 days to pay their bill each month.

The Credit Card Accountability, Responsibility and Disclosure Act, which was signed into law back in May by President Obama, is designed to put an end to questionable practices by credit card companies. The many rules of this law include placing restrictions on credit card billing practices.

Although many agree that credit card reform is long overdue, it’s important to see both sides of the equation. In an effort to fight back against these regulations – and control the amount of money they will lose – many creditors have already begun imposing their own set of new regulations.

What to Expect from Creditors

As many of us have already seen, creditors have begun raising interest rates. In fact, according to Bankrate.com, the average variable interest rate on new cards is about 11.22%, up from 10.69% just three months ago.

Many creditors have begun revamping their terms and conditions and have found ways around the new credit card restrictions. In other words, many credit card holders have seen their creditors switch up the rules in just the last, few months.

For example, many creditors have begun not only hiking up interest rates, but also slashing credit limits and canceling cards for less-than-stellar credit card customers.

In addition, don’t expect many mail solicitations for credit cards – although that may not be a bad thing – and don’t expect many credit card companies to offer introductory or “teaser” rates for new credit cards.

Whether we like it or not, we all must be prepared for creditors to fight back against the new credit card regulations. As with anything else, sometimes we all must take the good with the bad and learn to adjust accordingly.

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.