If you’ve been burned by debt relief and modification in your credit cards, then the new credit card rules may be a breath of fresh air – if you don’t mind playing with a new set of cards, so to speak. The CARD act is raising many industry eyebrows.
Justified rate increases
Double-billing cycles and rate increases without immediate notice will be disallowed, much to the dismay of credit card companies. Many companies started posting higher rates since last summer, saying that it was to offset the lending risks for credit card users, both new and old.
On one hand, this means that many people who have been getting their financial act together will have more safeties when it comes to handling their credit. However, those who are still in trouble may have credit denied them.
Competition
Still, the fear that competition would dwindle hasn’t come true, as the improving economy has healed some of the financial wounds that credit companies have suffered. Successful debt relief and modification actions have also strengthened the market, allowing more people to choose with their feet if credit card companies aren’t to their liking.
What does it mean?
If you got into trouble with your old credit cards, and you want to start over, you may have to give a good show of paying your old debts first, before applying for a new card. However, the good news is, once you do, there will be more ways to protect yourself from hidden charges and other temptations that will make you go down the slippery slope of debt again.
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