Rising credit card debt may have become a constant source of harassment for you. One solution to this problem could be consumer credit counselings. Counselings involves taking advice on how to handle your budget and how to pay off your credit card debts with ease. However, before you consider any financial solution you must be aware of the new credit card law.
This law protects you/the consumer from the changing interest rates, the confusing language and rising fees. This law is called the Credit Accountability, Responsibility and Disclosure Act and is not perfect. There are a few loopholes that you must protect yourself against.
Some ways to protect you and get the maximum benefits are as follows:
1. Look out for upcoming changes: As the old revenue streams are lost because of new regulations of the CARD reforms, the credit card companies will be looking for new ways to earn. This could mean that you could see an increase in annual fee, inactivity fee or fees related to balance transfer. All these hidden changes could affect you, so look out for these.
2. Try and pay more than the minimum: As per the new regulations your credit card company is to apply your payments first to the charges that have high interest rates. This is done to help you pay your balances faster and with low interest charges. However, you should realise that this benefit is only applicable when you make payments over your minimum. Your credit card company can still apply your money to the interest only. Your principal amount will not fall. So to make the best of the reform you should pay more than the minimum.
3. Be sure to read the notifications: As per the new law all credit card companies are supposed to inform you about any changes before they are implemented. However, you will only be able to get any benefit out of this provision if you do not check your mails frequently and are aware of all the notifications. Be careful when it comes to reading what issuers are sending you. Make sure that you get the right information on the right time.
4. Opting out of new changes: Another new characteristic of the new law is that you can opt out of the major changes in your account. This implies that if your credit card company wants to raise the interest rates or make any other changes, then you have the right to say that you are not interested. Due to this the credit card company may close your account. This gives you the adequate time to pay off outstanding balances. In another scenario, if the company thinks you are a good customer, then they will allow you to keep the account. The advantage is that you get to decide.