House Votes to Move Up Effective Dates of Credit Card Reform Law
Posted on November 3rd, 2009
The House of Representatives voted to move up the effective date for some of the legislation proposed under the Credit Accountability, Responsibility, and Disclosure Act (CARD). After constituents complained in the wake of receiving increases on credit card interest rates, lawmakers realized that something had to be done. Unfortunately for many of us, the credit card companies have already increased rates. The legislation that would be affected if the Senate likewise votes to move up effective dates includes:
- Banning retroactive rate increases on existing credit card balances.
- Protection from “triggered” increases in rates or fees resulting from one payment being late by a few days.
Unfortunately, consumer rights and welfare are likely to remain at the bottom of the priority list for credit card companies; they have tremendous influence in Washington D.C., and typically respond to regulatory pressure by passing along costs to customers.
Debt Management and Eliminating Credit Card Debt: The Consumer’s Solution
The best way to deal with credit card debt is by eliminating it. Whether you formulate your own plan for paying off your credit card debt, or seek help through credit counseling services, eliminating high cost debt is a strong step toward improving your finances. Here are some tips for dealing with credit card companies, paying off debt, and getting debt help.
- Shop credit card rates and offers: Compare credit card offers and don’t hesitate to transfer balances to new cards offering lower annual percentage rates (APR’s). The APR includes the interest rate and fees calculated as an annual percentage.
- Using balance transfers: Transferring balances between cards can work if you’re willing to carefully read offers and can pay off balances transferred during the initial offer period. Don’t stop reading at “zero percent for 6 months,” because balance transfers often carry transaction fees of three to five percent for each transfer. If you’re transferring from high rate cards, paying transaction fees may be worthwhile, but take time to do the math.
- Vote with your scissors: Stop using credit cards. It’s best not to close credit card accounts, because this can negatively impact your credit score. Pay off your highest APR account first, then concentrate on the next highest rate card, and so on until you’ve paid off your credit card debt.
- Create (and keep) a cash-based budget: The key to successful debt management is not carrying balances on credit cards. In order to do this, you need to make a household budget based on available cash.
- Getting debt help: If you’re stressing out over debt and it’s causing problems in your life, please seek debt help. You can work with a credit counseling service to arrange debt consolidation and affordable repayment terms. Regaining peace of mind and restoring financial security is well worth the effort.
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Tags: Card, Card Reform
Filed under Credit Card Services |