Payment Card News

New Rules to the CARD Game

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Although the new Credit Card Law restricts certain fees, such as those charged for surpassing credit limits or paying credit cards late but there are plenty of other charges that remain fair game, credit cards may start to ramp up additional fees. For instance, Fifth Third Bank last year began charging some cardholders $19 for not using their cards for 12 months. There is no limit to how high annual percentage rates can go. Some banks have raised interest rates to record levels weeks before the new laws went into effect. Six months ago the average was 12.7% and now it’s 14.6%. Not only are the banks raising rates to restore the profits they might be losing, they have also started changing some of their card products
to variable rates from fixed rates. Many of the largest issuers, including Bank of America and Chase, switched their customers over to variable rate cards in 2009. Late payments before the 60 day window will not increase your interest rates, but it will still show up negatively on your credit report. Open credit card statements quickly and review them to keep abreast of new terms. Some of the credit cards may have deadlines that must be met to opt in or out of to get certain terms. With banks trying to use every loophole they can find to help their bottom lines, it will be the consumer who will still suffer. If interest rates have already increased and annual fees are reinstated, how will the consumers get themselves out of the financial hole they may be in? Non-profit A New Horizon Credit Counseling advises that credit Counseling may be the solution and help with debt management, budget management and debt consolidation. Visit www.anewhorizon.org for more information.

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