Robert in Bixby is angry his credit card company just hiked his rate an astronomical amount. He says "It's hiked from 9.9% fixed rate to 17.9% flex rate. We feel we are being victimized with no option other than canceling our long-standing credit account."
Experts say do not cancel the account because that will ding your credit. If you're able pay off, or transfer, the full balance then only use the card occasionally and pay it off in full each month.
Bill Hardekopf, CEO of
LowCards.com predicts even with the reforms credit card issuers will look for ways to make up for resulting lost revenue. Watch for more companies charging annual fees and upping fees for going over your limit. Also cut-backs in rewards and cash rebates.
It is the time for anyone with credit card debt to make the top financial priority paying off those cards.
Hardekopf explains, further:
Here are some features of The Credit CARD Act:
* Makes it much more difficult for issuers to change rates, a dramatic shift from the existing environment where issuers can raise rates "at any time, for any reason". Prohibits issuers from increasing the interest rate during an account's first year. After that first year, an issuer can increase the interest rate if the cardholder is 60 days late in making a payment. If they do increase the rate, legislation requires them to review the account every six months and lower the rate if the situation warrants it. This allows consumers to regain their older, lower interest rate if they pay their bills on time.
* Tightens regulations for marketing credit cards to younger consumers.
Requires a parent or guardian co-sign for anyone under 21-years old, unless they can provide proof that they can repay the credit card loan.
* Requires issuers to use payments to pay off the portion of the balance with the highest interest rate first. Currently, issuers can apply the payment to the balance with the lowest interest rate.
* Bans double-cycle billing.
* Requires issuers to disclose how much interest will be paid as well as how much time it will take to pay off the balance if only the minimum monthly payment is made on an account.
* Bans over-the-limit fees unless a cardholder agrees to allow issuers to complete transactions that breach the credit limit.
* Prohibits issuers from charging fees to customers who pay their bills online or by phone.
* Bans gift card issuers from charging dormancy fees on cards redeemed too late. Also requires gift cards to be valid for five years.
* Requires issuers to mail their bills 21 days before the balance is due.
* Requires issuers to give customers 45 days notice (rather than 15 days) before increasing rates.
LowCards.com ( http://www.lowcards.com ) simplifies the confusion of shopping for credit cards. It is a free, independent website that helps consumers easily compare credit cards in a variety of categories such as lowest rates, rewards, rebates, balance transfers and lowest introductory rates. It also gives an unbiased ranking and review for each card. The LowCards.com Complete Credit Card Index ( http://www.lowcards.com/CreditCardIndex.aspx ) is the most objective and comprehensive resource on the Internet which allows consumers to compare rates for all 1060 credit cards offered in this country. Created by Hampton & Associates, the company has been analyzing the credit card industry and supplying objective websites on various consumer expenses for eight years.
