August 20 marked a new day for credit card companies and consumers alike. While there are certainly advantages to the new guidelines, be aware that the changes aren’t all beneficial. There are also disadvantages, as well.
If you have a credit card, you simply can’t afford not to understand the latest federal law passed regarding your plastic. Here is a breakdown of the latest rules and how they might affect you:
Benefits
- Credit card companies must give cardholders 45 days notice prior to raising their interest rates or changing fees.
- Credit card bills must be sent 21 days before the due date.
- Interest rate increases will only apply to future purchases, not existing balances.
- Credit card companies will be prohibited from jacking up interest rates for borrowers who do not pay their bills on time.
- Balances with the highest interest rates will be paid first, helping consumers to pay off their debt quicker and incur less fees.
- Credit card companies must disclose the consequences of only paying the minimum balance on their bill each month. (Ladies, if you have a credit card you should definitely be well aware of this one.)
Disadvantages
- Credit card companies are increasing rates faster than you can charge those new calfskin leather boots for this fall.
- Due to these new terms, which prohibit banks from slamming ridiculous fees, credit card companies are becoming pickier to whom they extend credit.
- Lines of credit are being cut across the board-even for borrowers who pay their bills in full each month.
It’s never been more important to be aware of what you’re being charged for having a credit card. In times of economic despair, you simply can’t afford not to. Call your credit card company for specific information pertaining to your card. You can also read more about the new rules and guidelines at www.BankRate.com.
