Will Anticipated Credit Card Legislation Really Help Consumers?

Posted on | January 22, 2009 | Leave a Comment

In July of 2010 there are going to be some changes in the rules dealing with how interest rates are handled with credit cards. This legislation is supposed to help the American consumers; however after reviewing them closely it appears more like a public relations stunt than something to truly assist the American consumer.

These are some of the most profound law changes that we have witnessed in decades and they come as a result of over sixty thousand complaints to the Federal Reserve over the past couple of years. The complaints are over when people suddenly find themselves getting their interest rates greatly raised on their credit cards.

One of the most beneficial changes is that debtors will no longer get their interest rates bumped up on existing balances when they go a day or two past due. Instead the interest rate hike would be put on future purchases not the existing balance like the creditors do today. However if the late payment goes past thirty days then the interest rate increase will be applicable to the existing balance as well. Credit card companies say in their defense that the reason for bumping up the rate is because these consumers are a higher risk of non payment.

One more change made is that the creditors must issue a 45 day warning to the fact that the interest rate is going to be jacked up; they can no longer just bump it up overnight without warning the consumer.

Personally I think this is too little too late! How come we have to wait until next year for these changes to take effect? In addition if you still go over thirty days late than you would still see the high interest take affect on your previous balance. And many consumers fall behind way more than one month, especially with todayâ€™ economy and employment market.

Furthermore these new laws will only take effect on the cards issued from July 2010 and forward. So anyone who has a card under a different sign up agreement will still fall victim to the creditorâ€™s scummy tactics. People trapped with high credit card debts should really figure out how to get out of debt as soon as they can.

One of the more reasonable methods in which consumers have been accomplishing this is through debt settlement companies; a method in which the consumer will save a lot of cash and become debt free within a couple of years. Getting you the correct credit card debt relief should be a top priority.