If you haven’t heard, big changes are here for the credit card industry. On Monday the CARD act goes into effect and consumers finally get some relief from such practices as “double-cycle billing” and arbitrary rate increases.
The new act, which was signed into law last May, promises consumers more transparency about their credit card bill. But cardholders still need to watch out for a whole new series of traps and tricks.
Higher fees: For starters, consumers could suddenly find themselves socked with a variety of new fees and charges.
Banks and other card issuers have already been aggressively implementing new fees or raising existing ones to help make up for any potential revenue lost as a result of the CARD Act.
Tougher to get a card: As Congress moved closer to passing the law last spring, banking industry advocates cautioned that shaking up the status quo would mean that credit would be more difficult to come by for consumers.
Fewer rewards: Consumers may also be increasingly unable to enjoy the fruits of their spending as a result of the new law.
It wasn’t that long ago where a cardholder could easily earn credit towards a free airline ticket or cash back for every dollar spent. But issuers are now quietly becoming more stingy with their rewards in an effort to save money.
Rising rates: One of the biggest victories for consumers in the new law are a series of limits on how and when credit card companies can set interest rates.
Whereas in the past, banks could raise your annual percentage rate just for missing a payment on your cell phone bill or without giving a consumer much advance notice, such practices will soon be outlawed. Issuers now have to alert you at least 45 days in advance before raising your rate under the CARD Act.
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Article courtesy cnn.com
