Credit Card Reform Brings Inadvertently Yields New Consumer Unfriendly Policies

During the past year, A series of regulations have been created as a part of The Credit Card Responsibility and Disclosure act or the (CARD) act As one might have predicted, that have prevented credit card companies from collecting some of the arguably superfluous fees they were previously built on collecting.  With all these regulations preventing credit issuers from collecting additional payments from consumers, cost to the creditors surely add up.   As a credit card holder, you may want to look out for the following practices that are either still allowed as common practice in the credit industry or new industry tricks. 

Balance carriers beware.  If you think keeping up with compounding interest with a flat interest rate is tough, your debt could soon spiral out of control with one of the common tactics credit card companies are using to cut their losses.  Credit issuers are converting select fixed-rate cards into variable rate cards.  Variable rates can cause a clash of problems as demonstrated by the recent mortgage crisis, namely putting you under a never ending pile of debt and ruining your credit score.

As a consumer, you should now remember to keep an eye out for notices of rate increases.  Even if you pay your balance on time, companies are still allowed to raise your interest rate as long as they notify you of the rate increase.  The only stipulation under current policy is that they notify you at least 45 days in advance.

Due to a combination of today’s economic climate and the (CARD) act, Creditors now have a newly elicited tendency to only choose the pick of the litter when it comes to their card holders.  Believe it or not, this wasn’t one of the intended purposes of the card act.  By limiting fees credit issuers can charge however, credit issuers now see previously fee-incurring card holders to less profitable.  To balance out risks and profits, credit card companies have had to change their vision of who is advantageous to do business with.  This is one of the many reasons credit repair is more even important now than ever.