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themoneyladder

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Read Before You Sign: Credit Card Change Of Terms


The Federal Reserve has drafted a new set of rules to protect credit card holders from unfair practices by card companies. Unfortunately these don't go into effect until 2010 and in the meanwhile, card companies are moving fast to make changes to boost their profits from fees and late payments.


Next time you get an updated customer agreement to read and sign from your card company, watch out for any changes that are meant to circumvent the rules set to take effect next year.

1) Interest rates can no longer be arbitrarily hiked up particularly in the first year of opening an account. At least 45 days of notice is required before rate increases. To outwit this legislation before it takes effect, card companies...(Read more of this comment) have started jacking up rates for current customers. Call your card company to demand an explanation for any rate increases on your card. 2) Because rates can be changed more easily on variable rate cards than fixed rate cards, companies are racing to convert their fixed rate customers into variable rate ones. Do not be tempted by offers to make to switch to a variable rate card with a low teaser rate. This is similar to what home buyers fell for when they signed up for ARM-type mortgages. 3) Planning to transfer balances? Ensure you are not charged an obscene transfer fee for getting out of your current card. Card companies are jacking up transfer fees to make up for the losses they fear are coming from the new laws.


For more smart, personalized and free advice visit my website at http://www.themoneyladder.com

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kenloebel

One more comment - the FICO score is a SCAM and a monopoly that the Government controls. Equifax, Experian, and TransUnion are "approved companies" of the government - and they do things like penalize you when you lower your interest rate by switching from a higher rate card to a lower rate card - in corporate USA that is called strong fiscal management.

When a card company lowers your limit, it allows them to apply a default rate to your balances - even if you have a good payment history, but the financial institution is managed poorly (check all credit card campany behavior in the past 12 months) -

Credit cards should be avoided at all costs - it is not worht subsidizing the crooks at those companies by paying their interest rates just for a purchase - simply stop purchasing until you have the cash!

kenloebel

Amex decided, after more than 22 years, that I was a credit risk worth charging 28% on a balance of about a thousand dolalrs. I work in a field where I get reimbursed, and I did not submit my expense report yet - so anyways - if I am being treated like a default customer, I will start to act like one - screw you Amex and all card companies that get fed funds of 0.25% and then screw the public with usury rates - I hope you all fail!!! Highway robbery doesn't begin to describe their antics- me, for one, will pay when I feel like it and will become my own bank going forward.