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Sep 28, 2009
New Credit Card Laws – New Details
It is no secret that the new credit card legislation will have a drastic effect on how banks and other financial institutions operate their business. The changes on your account can be likened as a double-edged sword. On one hand, certain changes can help you manage debt easier and attain debt management help. On the other hand, the new laws may also be confusing to consumers who are used to seeing the same charges on their bill every single month. To help you better manage your credit card charges; below are specific changes that had been implanted:
Interest Rate – in many banks, the annual percentage rate (APR) on existing balances will not increase if you pay late or exceed the credit limit. It will only increase if to the default rate if you fail to pay for the new transactions when it is due. It is also important to take note that consumers are encouraged to review their account periodically to determine if their APR should be lower than it is.
Grace Period – the grace period for repayment is more generous with the passing of the new credit card legislation. It can potentially help you reduce the amount of finance charges you need to pay. In addition, overlimit fee will no longer be charged. Be sure to check the terms of your card for further details.
Payments – the amount you pay in excess of the minimum payment due will now be applied to the highest APR balance first. This is a welcome change from previous practices because it helps you pay off high APR balances a lot sooner.
Payment Processing Time – another important change to the new bill has to do with the payment processing time. Mailed payments can now be processed on the same day as long as the banks receive it before their cut-off time.
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[...] points on a case-by-case basis. The rules may seem harsh but what’s even worse is that all major credit card issuers reserve the right to modify the terms of the agreement at any time, for whatever reason they choose. [...]
[...] Generally, credit card companies earn the most from slow payers. Paying only the minimum might not affect your credit score but you might end up paying more on the interest than the principal. This is not a good practice because it keeps you in debt for a lengthier timeframe. [...]