With the new Credit Card Act in place what does this mean to consumers? Consumers may now see a return to annual credit card fees. 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. We may start seeing credit cards 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. According to CreditCards.com Weekly Credit Card Rate Report the national average interest rate on new credit card offers hit 14.62 percent. This increase in the interest rates was the highest since they started tracking in 2007. Six months ago the average was 12.7% and now itâ??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. Some other things you should know about the new Credit Card Act are: â?¢ Late payments before the 60 day window will not increase your interest rates, but it will still show up negatively on your credit report. â?¢ You should now open your credit card statements quickly and review them to keep abreast of new terms. â?¢ Some of the credit cards may have deadlines that you must meet to opt in or out of to get certain terms. â?¢ The new Credit Card Act does not cover Business and corporate credit cards. â?¢ The Credit Card Act does not cap interest rates. The increased rate can still triple your existing APR. â?¢ A rate increase can't be applied to existing balances unless cardholder is delinquent. â?¢ Cardholders must be notified of a rate increase 45 days in advance, but there is no cap on rates. â?¢ Those under 21 can't apply for a credit card unless they have a co-signer, sufficient income or show proof that they have an independent means to repay the card debt themselves. 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? A New Horizon Credit Counseling may be the solution and help with Debt Management, Financial Literacy and Credit Counseling. A New Horizon is a well established Credit Counseling company with over 15 years experience as a non-profit organization assisting individuals and families from all walks of life in regaining control of their finances. This is accomplished utilizing Financial Literacy training and a host of programs to counsel and educate individuals on the responsible use of credit along with a structured debt management plan to assist them in paying off their existing debt.
Debt consolidation/credit counseling is the kiss of death. Nothing that these "agencies" do can't be done by yourself. If you're interested in spreading the word about your agency, why don't you buy an advertisement?
Credit Counseling is viewed just as negative as if the consumer had filed chapter 13 bankruptcy. Only difference is once the consumer completes the program the notation gets removed off of the credit report. Consumers have to watch out for these problems. 1. Make sure the CCCS actually made an agreement with the creditor or collection agency. Sometimes they tell the consumer they did just to take their money. Then the consumer finds out months later that all the applied payments didn't bring down the balance because there was no actual reduction in the interest rate. 2. Make sure the arranged payment date, meets with the creditors due date, if the CCCS makes a late payment it will default any agreement previously made. This will result in the interest rate going right back up. If the consumer calls in the creditor they may be able to arrange a new payment due date. There are national credit counseling services a consumer can use if they need to, but consumers should only go with non-for-profit companies, and they should always check the better business bureau and chamber of commerce before entering a relationship with a CCCS. I don't particularly like these companies, there is so much that can go wrong. And by paying on some debt it is resetting the statute of limitations so if the consumer defaults again, the creditor has more time to sue the second time around.
Chapter 13 is a better option. A HELOC is better if you have any equity although your scores will drop until the HELOC is paid down.
why not cut up the dam credit card,s and learn to live with in your means.you can not afford the cost of credit,no one can.you play by there rules and pay for your fico score each month in your payment,s.if you pay them off and don,t use the card they want to charge you,if you charge too much your score goes down,if you charge too little your score goes down,if you cancel your score goes down.you have to play by there rules which is pay for your score each month. for me i don,t want there credit i cant afford it and i bet most can,t.
Why not cut up the cards? Because there are some instances where you need to use a credit card. And credit used wisely can help build wealth. Use other people's money, but use it wisely. For example, I have a credit union card that returns 1% on purchases. Not at the end of the year, not if I spend x dollars, but 1% of every bill is given as a credit on the bill. Pay within the grace period and don't pay any interest. Right there, I can save 1% on EVERYTHING I buy!
hedwig,most people don,t have the discipline to use credit very wise and most need to have the temptation removed from them.i feel that if people would save they would,nt need credit cards.what did people do before there were credit cards.
Before there were credit cards, the world was different. That's like saying what did we do before there was the internet. The fact of life is that now you need credit. You need to learn discipline. Only buy what you have the cash for, but use the credit card. Put the cash in an envelope and use it to pay the bill when it comes. But the truth is that this world revolves around credit. Have no credit and many places you'll have no job--or not a very good one, anyway. You won't be able to buy a house. Like it or not, credit is part of our way of life. People do need to learn discipline, but it can be done.
If I may, use a credit card like a checking account. In other words, make subtractions in a ledger and pay it off just as if you were operating under the paradigm of avoiding overdraft fees. Works well. Contrary to popular belief, their is no quantifiable data that says carring a small balance increases your FICO either so just pay it off but, again, use them.
i understand what you are saying ,but for some people its comparable to telling a alcoholic to just have one drink.
for some people such as alcoholic,s,it it would be a good idea if alcohol was,nt, so easy to get.the same with some one that cant control there credit lines.not the case for everyone just those that over indulge. .
I agree, in part, with both posters above however, the fact remains that credit is there. It isn't as easy to get anymore but, it's still out there. In a country that prides itself on freedom, you have to allow people the choice to use credit. If they destroy themselves financially by virtue of said use, or misuse rather, that is their fault in my opinion. I suppose my point is that you can't proscribe lending simply because "some" people misuse what is lended to them.
no where in my post did i say that credit should not be allowed or that in some cases it should not be used.i just get tired of people wanting to know how to get out from under a collection agency or how to avoid a suit and at the same time are wanting to know how to get started on credit cards again.most did not learn from there first mistake and are eager to jump back in again. before the card is cold and buried there looking for a hot new one .usually most people need credit for big ticket items cars ,home ,airplane and i see no problem with that.its when some one charges a three dollar happy meal and leaves it on there balance and then pay,s interest that,s what i don,t understand. but i agree that it is a right to have credit and it is a collection agency,s right to collect when one can not or does not pay there bill. when that happens people should not be trying to figure out how to get another card until they take care of there first obligation.
