Credit Card - Faclity or Enigma

In past few days there is lot of happenings in Credit Card Industry. You may have heard about this on the news or read about it online, but I'd like to go into some detail about what this means for you as a consumer. First, let me remind you that good spending practices and budgeting are ways to avoid financial pitfalls, especially in the state that the economy is in. Avoid buying solely on credit, as your credit score will reflect negatively. Good credit will make future purchases less expensive, so it acts as a reward to those who are responsible.

Credit Card Accountability Responsibility and Disclosure Act of 2009 (CARD) Act is making a significant difference in the way credit card issuers carry out their businesses. The Act is likely to come into play from February 2010 unless the government decides an earlier effective date.

The new rules make it mandatory for the credit card companies to give consumers a warning of at least 45 days as against the current 15 days before increasing the interest rates. Again all statements need to be mailed 21 days before the due date as against the current norm of 14 days. Credit card users have been granted the option to cancel their accounts if they opt out of the interest rate hikes and pay off their remaining balances at old rates. Some more rules are likely to take effect in February and August, respectively. At last some relief for the credit card consumers who are fed up of unexpected rate increases.


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