Congress made a change in the credit card laws. This credit card change will apply both to the consumer and to the companies that issue credit cards to consumers. First we should give you the definition of this law that was changed. The law that I am speaking of is called The Credit Card Accountability Responsibility and Disclosure Act of 2009. In short it is defined as the “Credit Card Act of 2009” or the “CARD Act”. The definition of the CARD Act is this: a major credit card reform legislation that will establish fair and transparent practices relating to the extension of credit under an open end consumer credit plan, and for other purposes.
Okay then, what does this mean to you as the consumer who uses credit cards on a regular basis? If you are a high risk consumer and have bad credit, this credit card change will not be good in how it applies to you. One of the biggest credit card changes you will see is the lowering of high fees on credit cards. These are credit cards that are given to people with poor credit. This credit card has a low limit but then adds charges of extremely high fees right up front. The credit card company feels justified in doing this as these people are high risk and they need the money from these consumers as they feel that they may not get any money paid back to them. Now think about this for a second. If you know that they are a high risk, why even give them a credit card to begin with? The answer is people with high risk should not be given credit cards at all. These people should stick with prepaid credit cards or obtaining a secured card through their bank.
Another issue might be to look and Survival. What I mean is that if you are having a lot of troubles paying all your monthly credit bills, look at a means of surviving the future onslaught of collectors that are about to swoop down on you and your family. You can learn how to frustrate debt collectors and collection attorneys, avoid a credit card debt summons and most importantly, stay out of bankruptcy.
Here are a few things you should focus on:
- Not having to choose between monthly necessities and credit card bills.
- Stop worrying about not paying your credit card debt.
- Not having to cave into debt collector demands and payment schedules.
- Knowing the best answers for your particular problem if and when you need them.
- Not making bad decisions, if debt collectors are at your doorstep.
- Saving time when there is little time to respond to a debt collector or collection attorney.
- Being able to preserving the privacy of your financial affairs.
- Avoid bad-debt consequences and maintain control of your life.
- Not losing money you do not have to pay debt settlement, debt negotiation or debt consolidation companies.
Here is a great resource for Surviving Credit Card Debt
So what does the CARD law mean to you if you are not a high risk person, you have good credit? Well, if you are one that looks at lower interest rates that cards offer and transfer balances frequently, you will not have this luxury any longer. It will not be gone completely, but the lower rate will be for a much shorter period of time. You may not think that it will even be worth doing the transfer to begin with.
If you are a small business owner and have company credit cards, the CARD Act may not apply to you. As of now, the CARD Act applies only to consumer cards. But don’t hold your breath thinking you are out of the woods. Credit card changes could be coming down the pike even as we speak.
As for small businesses, there is a Gold Business Select program that guarantees you access to a team of experts in the field of business credit who can walk you through the process of what it takes to establish hundreds of thousands of dollars in Business Funding. You can reach them at Business Select Program.
What if you do not have any credit cards, but you do use your banking credit card, which really is a debit card? One good that I see in continue using a debit card is that you can no longer be charged for overdraft fees. Your bank must give you a form to sign stating that you do not mind being charged overdraft if you do go overdrawn. In other words, you “opt in” before the bank can charge you these fees.
What if you use a gas credit card offered by an oil company? The CARD Act will influence this type of card. For instance, if they offer a revolving feature in payments of the card, this will be more expensive for you in higher interest rate. They will also lower the refund amount in which you get in return for using their credit cards.
If you are one to use prepaid credit card or gift cards, the CARD Act will allow the company to have pre-purchase disclosure fees. This might include an inactivity fee. Most of these cards will now have an expiration date. They may also limit you on the amount of money you can load onto the card. The companies that issue these cards feel that they have no choice in enacting these fees as they really do not make much money on them to begin with.
If you have credit cards that offers you rewards for your purchases, this will have changes as well. No longer will rewards just be given to anyone, but rather, you will have to apply and see if you qualify for the program up front. Companies are screening their customers more closely to see who should be allowed the rewards and who should not. Companies are looking more of doing away with rewards and cater more towards the individual spending habits of their clients and issue “rewards” on their personal likeness.
Student credit cards will now be a thing of the past. The CARD Act prohibits marketing of credit cards to anyone under the age of 21. A student must now show proof of income or have a parent co-sign to get the credit card. These cards have low credit limits and higher interest rates. Some companies are offering discounts on coffee or textbooks if you are good and pay your bill on time. This way the student can use the discount immediately. However, more students are given prepaid credit cards or gift cards instead of credit cards.
The CARD Act creates lots of changes for all kinds of credit card users. It really depends on which type of credit cards you use to determine how you are affected.
I hope this gives you a better understanding of the changes in the law and how it relates to you. Let me know if this information was good for you.