Back in May, President Obama signed "The Credit Card Accountability, Responsibility and Disclosure Act of 2009" which will require the issuers of credit cards to present their rules and fees "in plain English" instead of in the convoluted legalise that they have gotten away with for so many years. In addition, they are forced to drop some of their misleading practices, such as delaying the posting of payments that arrive on time so that issuers can charge a late fee.
While the majority of the provisions don't take effect until February 22, 2010, some significant (and empowering) changes become effective today (August 20, 2009). These include that the fact that issuers must mail statements to customers at least 21 days before the payment is due. Also, issuers are required to provide 45 days notice before increasing annual percentage rates or changing terms of agreement on the account - this is a big deal! Up to now, the issuers had to provide just 15 days before these increases and changes took effect.
Not surprisingly, credit card issuers were not happy with the president's decision to help consumers and immediately tried to make financial lives tougher while they could. According to Adam Levin, chairman and co-founder of credit.com, "several card companies have been increasing fees, reducing credit limits, raising rates, boosting minimum payments and dropping customers with high balances."
Personally, I had an experience a few months ago where one of the card companies cut my available credit in half, largely because I don't use the card very often and when I do, I pay it in full. They don't like that - they call those of us who pay off our balances "deadbeats." So, I called them right away and told them that I wanted my available credit reinstated at its full amount and because I have an excellent payment history, they had no option but to do what I wanted. Basically, they did not want to risk me leaving them and going elsewhere. Hey, I may not use the card a lot, but they figured it's better that they get some money from me sometimes than no money ever!
Come mid-February of next year, the other changes in the law will take effect, namely
*If a card has a balance at varying rates, payments must go towards the higher rate first.
*If the interest rate on the card goes up, it cannot be applied to an existing balance. It can only
be applied to new purchases.
*Double cycle billing will be prohibited. In the past, companies would take the average daily
balance from both the current month and the previous month and calculate finance charges.
(DID YOU KNOW THAT?)
*Also, and I like this one A LOT, marketers cannot hawk students who are less than 21
years of age without a parent's signature of unless the card company can PROVE that
the student earns enough money to pay the bill.
These are some of the main things to be aware of. As we move closer to the full
implementation of the law on February 22, 2010, I'll keep you posted on other significant changes and happenings.
For now, my advice is to follow the tips and pointers I've provided in the posts written to date and check back weekly for more valuable advice as together we get you OUT OF CREDIT CARD DEBT!!
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Some companies are legitimate; others are not. You always need to be careful. I advocate being self-reliant when it comes to getting out of credit card debt. Of course, sometimes there are extenuating circumstances, but the best way to avoid credit card debt in the future is to work yourself out of it the first time and learn from the experience.
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