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Step 1
First and foremost, be in the lookout for fine prints of the changes from your credit card company. You can proactively call your company to find out how they are planning to comply with the new legislation and how you can benefit.
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Step 2
The law changes prevent rate increases for only existing balances. I.e. credit card companies can still charge whatever they want for new balances that you incur.
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Step 3
If you pay your balance within 60 days, you can’t be subjected to further rate increase. If you do go past 60 days, then your credit card company can charge at a higher rate for up to 6 months, at which time they are obligated to lower rates to earlier levels.
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Step 4
You will now have 45 days advance notice for any rate increase, and 21 days for regular monthly statements. So look for your statements to come in earlier than usual, take full advantage of the extra time in planning your finance.
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Step 5
You will also receive clear explanation of the implication of rate increase and how long it will take for you to repay if you were only paying minimum balance due. Pay attention to the extra information in your statement and take full advantage of the disclosures.
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Step 6
You can only be charged late fees 3 times in a row. Fed will also regulate and cap the charges.
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Step 7
Given the loss in revenue, the credit card companies are going to be creative in increasing the rates elsewhere. For instance, balance transfer, new balance rate, account fee and other such service charges. If you are thinking of consolidating debts, now would be a good time to do so to grand-father in your existing rates.
Comments
vernk said
on 7/2/2009 good info thanks!