Tips for Successful Personal Finances
The New Credit Card Act of 2009 takes effect on February 22, 2010. To help you prepare, my blog will feature Nine Tips over the next three weeks.
Tip Number Eight
Does it ever feel like your credit card bill is due the same day it arrives in the mail? That’s changing with the Credit Card Act of 2009. Creditors will now have to mail your bill 21 days before the due date.
The New Credit Card Act of 2009 takes effect on February 22, 2010 To help you prepare, my blog will feature Nine Tips over the next three weeks.
Tip Number Seven
Do you ever wonder why it takes so long to pay off your credit card balance? It’s partly because creditors apply your credit card payment to the lowest interest rate balance first.
Here’s an example: Let’s say you took a zero percent balance transfer offer. Then, you made some new purchases on that card. In the past, your payment would go to the balance transfer amount first until that’s paid off, while you’re interest rates pile up on those clothes you bought 6 months ago. That allowed the credit card company to make the most interest it possibly could possible off your purchase.
Well, no more. The Credit Card Act of 2009 will require creditors to apply your payment to the highest interest rate balance first.
The New Credit Card Act of 2009 takes effect on February 22, 2010 To help you prepare, my blog will feature Nine Tips over the next three weeks.
Tip Number Six
How do you handle your credit card payments? Do you pay the balance very month, or do you only pay the minimum?
Your bill will now include a section that tells you how many months it will take to pay off your credit card balance if you make only minimum payments. That will be an eye opener for some of us.
The New Credit Card Act of 2009 takes effect on February 22, 2010. To help you prepare, my blog will feature Nine Tips over the next three weeks.
Tip Number Five
Have you ever received a credit card bill with a Sunday due date? Were you charged a late fee if they didn’t process the payment until Monday? That’s changing with the new Credit card Act of 2009. Your payment won’t be marked as late if it’s due on a weekend or holiday, but posted by the next business day.
The New Credit Card Act of 2009 takes effect on February 22, 2010. To help you prepare, my blog will feature Nine Tips over the next three weeks.
Tip Number Three
In the past, you wouldn’t know if a purchase put you over your credit limit until you received a big fee on credit card statement.
But that’s changed. Now, if a purchase will put you over your climit, your purchase will be declined. With the new Credit Card Act of 2009, only pre-authorized purchases will be approved.
(Remember, this doesn’t apply to your debit card. You’ll receive no warnings if a purchase will overdraw your checking account. )
There was a time when our mailboxes were full of credit card offers. Now the offers have been replaced with policy change notices.
Credit card companies are racing to make changes before the new regulations hit in February 2010. They’ve have had a bad couple years. It used to be easy to make money in the credit card business, but things have changed.
The first issue is defaults. Because of unemployment, more people are defaulting on their debts. So, credit card companies have been lowering everyone’s credit limits to help reduce the risk. Their reasoning is sound. The less debt you have, the less debt they will have to cover. Expect your credit card limits to fall even if you have a good payment history.
The second issue is pay offs. More people are paying off their credit card debt because they’re anticipating layoffs. This means that the creditors are earning less from interest payments. They need risk-free revenue, so they’re looking at annual fees. Expect your credit card company to either add an annual fee or increase the fee you already pay.
Right now, under the old regulations, they can still make changes to your account with minimal notice. If you get an unpleasant policy change in the mail, you should definitely call the credit card company and try to get them to revert back to the original terms. If that doesn’t work you can always close the account.
Have you heard about the new credit card rules? Credit card companies must give you more time to review statements and rate changes, which helps you make better decisions when dealing with debt.
Statements must now be mailed at least 21 days before the due date. Credit card companies make a good profit from late fees and rate increases. To increase the amount of late payments, they began billing closer to the payment due date, sometimes forcing you to pay within a week. This allowed them to add fees and raise rates based on payment history. The new rule allows you a standard billing cycle to review your statement and remit payment.
Second, creditors must now notify you within 45 days of a rate change. This is better than the previous 15 days notice. The rule change gives you a chance to accept or decline the offer, and gives you time to shop for a new credit card company.
The rest of the Credit Card Act will go into effect next year, hopefully with more consumer protections. Remember: if you owe creditors a balance that can’t be paid in full each month, you give them power over your financial health.