Changes with your credit cards

Innovative Credit Consultants keeps up with the news so that consumers can be up to date in all areas related to credit repair. Headlining the news this week is new information about credit cards. CNNMoney.com explained there are “big changes” in effect for credit card users. Innovative Credit Consultants understands you need to know about this.

The Credit CARD Act of 2009 went into effect February 22, 2010. The public will get relief from predatory practices like "double-cycle billing.” However, large credit card companies are more determined than ever to find ways to sneak away your money. They sense they may be headed for some economic downtime, so consumers are looking at less rewards, higher fees, rising rates, and less cards being handed out.

Many companies will slow down, or stop giving rewards altogether. For decades, it has been common for consumers to build a cache of points towards rewards. Rewards can include: a free plane ticket, cash back or bonus money to a store. (This was also a trick on their part, as grocery stores and the gas pump tend to be where people use credit cards the least, preferring debit cards, cash, or even a personal check.) American Express is the first to announce to their customers that they would no longer earn points on purchases if a payment was late. An extra fee of $29 would be the only way to gain those points back.

It's time to go over your new Terms and Conditions with a fine-toothed comb. Card companies and even banks have been applying new fees and finding ways to raise pre-existing fees to counteract any potential lost revenue. Last year, for instance, Discover announced that any transactions made outside the U.S. would be subject to a 2% fee, while JPMorgan Chase began charging a 5% fee to roll balances to a new card, instead of the industry-standard 3%. This new law sets no restrictions on the types of fees a creditor can charge. You better know your terms and conditions otherwise you could be in for a nasty surprise when your bill arrives.

While consumers are relieved the credit CARD Act incorporates "how and when" rate restrictions, there are a few loopholes you need to watch out for. Banks and credit card companies can no longer randomly raise your interest rates, they must give you a 45-day notice; however, there is no cap on the interest rates banks and credit card companies can charge consumers who have been late in payment by two months. The days of unreasonable rate hikes are not over, especially for consumers who are still overwhelmed by debt.

The tough days of obtaining a card even with poor credit will not be even tougher. The amount of credit made available to consumers after Phase One of the CARD Act went into effect last year nosedived by $252 billion between March and September. That's a full 7% decrease in just six months. If the trend continues as predicted, we could be looking at another 3-7% decrease after Phase Two is implemented. If your credit is in good standing, this should not affect you overmuch, but college students will certainly be feeling the pinch.

As a consumer, your overall knowledge level should remain the same. Don't forget to do your research, and don't let your credit cards take advantage of you. Be extra-wary with bank-issued cards, as they may now come with extra fees attached that were not previously there.

If your credit report has been affected by your credit card use, call Innovative Credit Consultants today for a free credit report evaluation and credit repair consultation. Top credit repair experts are available and will help you gain knowledge about credit cards and credit repair.