Key changes that have come after the new credit card law
In case you are being troubled by rising credit card debt and do not know how to get out of the situation, then you should try to opt for consumer credit counseling. This helps you get a fair picture of your debt and when you opt for counseling you also get to know what the best ways to pay off your credit card debts are. However, before you consider any debt solutions you must know the new credit card laws. This law is there to protect you/the consumer from any sort of fraud, from the changing interest rates and the constant rise in fees.This law is called the Credit Accountability, Responsibility and Disclosure Act (CARD). It does give consumers added protection and you could really benefit from it. Some of the key changes that you should be aware of are as follows.
1. Reform in interest rates : Your credit card company is to inform you 45 days in advance in the event of an increase in rates. The law also states that all increases in interest rates on outstanding balances will be prohibited so no credit card company can increase interest rates. You should also know that as per the law your credit card companies can not charge you any interest for the first year of the opening of your account.
2. No more confusing billing practices : This law ensures that the process of making credit card payments becomes simpler. As per the law, payments that you are to make will be due on the same date, every month, to avoid confusion. Your payments are to be applied to the highest interest rate balances first. This is to be done so that you can pay off your balances more cheaply as well as quickly. Finally they are also to use simple language so that you can understand all well. They are also to issue statements that tell you how long you will take to pay off your debts if you pay only the minimum.
3. Protections related to overdraft and over limit : Now instead of being enrolled automatically you will need to opt for an over draft program. This implies that if you try to purchase for an amount that exceeds the limit of your limit or overdraws a debit account, then your card is going to be declined. This is better for you, as before the law was passed this process would go through and you would be fined.
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