With new credit card regulations going active on February 22, 2010, some of you may be wondering: are there unforeseen results stemming from the credit card reform act signed in 2009?
The ability to pay
Credit card companies will have to asses a person’s income and debt details, by verifying what people put down as their income in the applications. While this isn’t a bad idea in itself, this will affect small business owners and low-income families who use credit cards as a lifeline in times of crisis. This, too, raises questions for the unemployed, and about the ability of smaller businesses to raise capital and to improve themselves.
Car loans, mortgages, house expenses and medical bills all figured into the emergencies that credit cards were used as a stopgap measure. For those who know how to cycle through their finances, a credit card simply allows them to space out the payments, rather than have a heavy single-time sum. But with the new regulations, even financially responsible people may be unable to get the credit cards that they need.
Banks, however, can rely on income estimates based on previous spending habits, ability to pay loans and types of accounts opened.
What you can do
Be aware about how the credit card you’re applying for will verify your income – and if necessary, provide them with more info that you think will help. Also, if you have any debt unpaid at this point, then it’s time to pay them off as fast as possible. Credit scores will now play an important role in how credit cards will be approved.
Sign up on the box at the right to receive more options you can use with the credit card reform in mind.
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