On the one hand, the new credit card rules require that banks give you a much more advance warning before raising your APRs – as a matter of fact they will have to provide you with at the very least 45 days before increasing your interest rates, this number is up from 15 days previously. Also, they will have to mail your bill to you at least 21 days before the credit card’s due date, this number is up from 14 days, giving you a week more time to pay and hopefully making it a great deal less likely you’ll suffer late fees due to postal service delays.
Those changes, which are going to go into effect Thursday, are just the beginning of a flurry of new consumer protections under the new Credit Card Accountability Responsibility and Disclosure Act (CARD), put in place earlier this year. Other rules, including a ban on interest rate hikes on outstanding balances and limits on the banks ability to charge over-limit fees, will go into effect next year.
APRs and fees are likely to increase.
However, some specialists say that not everything is well and good. They point out, for example, that many credit card companies are trying to get a jump on the new law by jacking up interest rates and fees already. In fact, if you’ve received any letters from your lender in the past few weeks, you better read it over carefully – it may contain some very unpleasant surprises. If you have already thrown the letter out, access your account online or over the phone and check for any new notifications.
Be alert also for any upcoming changes; it’s extremely recommended for at least the next year that you read your billing statement extra carefully for any new notifications of changes in your charge card terms. Of course, that’s a great idea anyway, even though many people often ignore it among the blitz of monthly statements that arrive in the mail.
Many analysts expect that banks are going to try to counter the new regulations with creative new regulations of their own or do something else that will be sneaky to try to make up for lost revenues. Higher rates are most likely for many consumers, you may also see your credit card company going to a variable interest rate program where the interest rate on your card fluctuates. You can also expect to see fewer rewards programs, as well as many cards that are currently no-fee may be adding annual fees in the near future.
Even customers who regularly pay their balance off completely every month could find themselves getting hit with unexpected fees, for such things as receiving paper statements, service calls that involve a live employee, balance transfers, cash advances and other services.
Be on alert for notifications from your bank.
Be alert as well for reduced credit lines. A lower than expected limit could put you at risk of an overcharge if you make a major purchase after a credit limit reduction. In addition, a lower credit line on a charge card account where you’ve been carrying a balance could have an adverse effect on your credit report, if the reduction means you’re using up most of your available credit on that one card. It is better to spread your purchases over several credit cards or, better yet, pay it off and leave the cards alone!
Even with the changes, analysts say the best way to avoid getting burned by new fees and rates is still the same old advice – avoid carrying a monthly balance on your credit card. Pay off your balance completely each month, if at all possible, and if you can’t do that, put yourself on a schedule to pay it off in the near future. For most consumers, paying twice the monthly minimum, assuming that there will be no new charges, should enable them to pay off their balance in full within 2 and a half years, and you’ll be amazed at how much more financial freedom you have once you’re no longer dragging that debt around.
For more information on this topic or if you need any other advice regarding credit cards, budgeting, or over all finances feel free to contact us:
By phone – (561) 355-0069
By email – Support@JemCreditCards.com
On the web – www.JemCreditCards.com
Also, one of the lenders with the least changes is Discover card I advise them as a first choice credit card!
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