Just because there’s been a credit card reform doesn't mean that consumers can relax. Now people have to be wary a lot more than they ever have before. The credit card reform act of 2009 is cutting into some of the a lot more underhanded credit card scams from many of the financial institutions. So now those institutions are just trying harder to sign individuals up for credit card debt than they ever have. And they’re looking for more ways to make money with new fees and higher late fees. Credit card users need to read the fine print on applications and read statements carefully when they receive them.
Source for this article: With credit reform, credit card offers are getting a lot more deceptive By Personal Money Store
Credit card offers
Credit card companies could be extremely hard to control. Even with a terrible economy, the credit card reform act of 2009 has credit card business marketing efforts going crazy. According to Synovate Mail Monitor, which tracks direct-mail offers, credit card spiels to U.S. households increased 29 percent during the first quarter of 2010. Some of the companies have doubled their efforts. Some of the largest ones are just predatory within the fees they come up with to charge customers a lot more.
Scams for a credit card
You will find numerous creative credit card scams. Many say the late fees are there for risk. But now there is a new report with the Center for Responsible Lending shows that late fees have nothing to do with the credit card company’s potential loss. According to the report, late fees aren’t pegged to the risk a borrower might default on their credit card debt. Instead, nine of the top 10 characteristics of credit card companies who charge high late fees are deceptive practices. One is if a customer is late, the interest rate goes up. An additional is to have the payment deadline be for early morning on the due date.
Credit card late fees and even more than that
Credit card late fees are just the beginning. USA Today reports that other tricks to look at out for consist of balance transfer fees, shorter introductory offer periods, and also the fine print about annual fees on rewards cards.
Balance-transfer fees: Credit card companies offer percent introductory rates to transfer balances to a new card. But increasingly, they’re charging fees of up to 5% on the amount transferred, with no cap. It could cost $ 1,000 to transfer $ 20,000.
Shorter initial offers: Some credit card companies offer percent interest for up to 18 months, but a six months is becoming much a lot more common. The credit card reform bill prohibits any of the credit card companies from offering introductory rates for less than six months. Card holders must be realistic about whether they can pay back the balance before the offer expires. Also, credit card companies cancel the introductory rate with late payments.
Some Annual fees: A lot more rewards cards are coming with annual fees, especially airline credit cards. When using these companies, calculations can be a lot more difficult. Unless it takes you years to get it, a fee may be worth the ticket. Nobody who travels on average terms will want the mileage card. Some of these great rewards cards will withhold rewards because of a late payment and demand a reinstatement fee to reclaim the rewards.
Everything costs a lot more with credit cards
Because of the credit card reform act of 2009, credit card offers are exploding. But an unhealthy economy and credit card debt are a bad mix. As outlined by Smartmoney.com, when the economy is struggling, the value of goods and services falls relative to the value of money. That situation puts people with a lot of credit card debt between a rock and a hard place. The value of things die when the price of everything falls. When a product is charged on a credit card, the ultimate price paid for it rises as the product loses value, and that does not include interest.
Find more info on this topic
Center for Responsible Lending
responsiblelending.org/credit-cards/research-analysis/a-just-fee-or-just-a-fee.html
USA Today
usatoday.com/money/perfi/columnist/block/2010-06-01-yourmoney01_ST_N.htm
Smartmoney.com
smartmoney.com/Personal-Finance/Debt/carry-credit-card-debt-watch-the-dollar/
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