As Seen in Newsweek, Woman's Day, Woman's World, Quick & Simple, The Family Life Network, NY Times and Associated Press

Michelle Jones, Founder and Publishing Editor of BetterBudgeting.com

E-mail Michelle
Facebook - Fan Page
Facebook - Michelle
Twitter
Bookmark and Share

Copyright by BetterBudgeting.com

Enter Your Email for Our FREE Monthly Ezine and Free Ebook... "Dealing with Debt"

Reader Feedback

Dedicated to Helping Families LIVE A BETTER LIFE...
Not by Spending More Money, but Less!

  Join Us Today!!!

Home | Register for Better Budgeting Class | Print Free Budgeting & Debt Worksheets
Free Debt Ebook | Subscribe - Free Membership to Living a Better Life® - Yes, it's FREE!

, 2010 

Welcome to BetterBudgeting, Where We've Been Helping Families Save Money and Live Better Since 2001! Get Our Free Monthly Ezine and Save with Thousands of Tips on Budgeting, Credit Cards, Getting Out of Debt, Frugal Family Fun, Frugal Recipes and Crafts, Groceries, Budget Friendly  Decorating,  Gardening and Work-at-Home Business Ideas

Home
Article Index  

Monthly Contest Tip Rewards
Meet the Editor
Dinner Blog
Translate
Search this Site


Budget Help
Budget Help:
Budgeting Articles
Better Budgeting Class
Budget Calculators
Budget Planners
Budget Software
Free Budgeting Forms


Resources to Help You Save Money
Resources to Help You Save Money:
Book
Credit Reports
Credit Scores
Dealing with Debt
Dental Plans
Entertainment Coupon Book
Free Insurance Quotes
Find a Job
Frugal Cookbook
Grocery Coupons
Grocery Savings
Lower My Bills
Menu Planners
Paid Surveys
Shop & Save
Unclaimed Cash
U.S. Tax Help
Work-at-Home Business Guides


More Money Saving Topics!
More Money Saving Topics:
Bargain Shopping
Decorating on a Budget
Frugal Household Tips
Frugal Living
Frugal Parenting
Frugal Recipes
Frugal Travel Tips
Gas Saving Tips
Getting Organized
Holidays - Frugal Crafts & Homemade Gifts
Thrifty Money Saving Tips

TOP "HOW TO" EBOOKS:

Frugal Family Recipes - How to Feed Your Family at Home on a Budget

How to Own Your Own Paycheck Again

How to Shop Smart with Our Very Own Black Belt Shopper

How to Start a Home Business

How to Use Coupons Wisely and Truly Get Organized So You CAN Use Them

 

 

Credit Wise
(featured column)

Jennifer Wallis - Senior Writer at BetterBudgeting.com

 

What the New Credit Card Law Means to You

by Jennifer Wallis

 

Many people in the financial industry are waiting for the other shoe to drop in response to the credit card reform law that recently passed. Since it goes into effect in 2010, many are speculating about how the credit card industry will respond to changes that will most certainly impact their bottom line. If you are a consumer with credit card debt, you may be feeling a little nervous and anxious about how the law will affect you. Let's go over some of the changes.  More...

 

While the law itself is designed to help consumers, it remains to be seen how credit card companies will react between now and when the law goes into effect in 2010. Some experts speculate that credit card companies could raise current rates on consumers with a current balance. Others say that consumers may start being charged annual fees as well as interest at the time of purchase (instead of the usual grace period). Rewards that many credit card customers enjoy such as rebates, frequent flier miles, etc., could also be reduced. At this point, we can only guess if those carrying balances will have to start paying more in the coming months.

As consumers, we don’t have much control over the response of the credit card companies. The law itself was designed to protect consumers and help those especially that carry a balance. 

Some changes are :

Interest rate increases : Credit card companies will not be allowed to raise your interest rate on an existing balance unless a promotional rate ends (you received 0% for six months and now your six months is up), if you have a variable interest rate (an interest rate to is set by financial market conditions such as the prime rate), or if you make a late payment. Once you make six consecutive on-time payments, the interest rate must go back to the former rate. Also, credit card companies must give you 45 days notice if they are making any significant changes to your credit card agreement.

Universal default : Many consumers don’t understand the nasty little practice of universal default. It allows all of your credit card companies to raise your interest rate if they determine you are a higher risk than you once were. For example, let’s pretend that you’re struggling one month. You can pay all of your credit cards except for that one Citibank card. That one payment is going to be late but everyone else is paid on-time. The credit card companies can review your credit report to see how you’re paying all of your creditors. Let’s say that your other creditors, Bank of America and Capital One see that you paid Citibank late-even though they were paid on-time. Under the current universal default rules, they could also raise your interest rates on their cards because you are now a higher risk. With the new law, this practice will no longer be allowed.  

Over the limit fees : Consumers must now opt-in to pay over the limit fees. If they do, purchases that put you over your credit limit may be approved but you will be charged an over the limit fee for that. Otherwise, any purchase that will send you over your credit limit will be declined.

Minimum payments : Credit card companies must now disclose on your monthly statement the consequences of paying only the minimum. Specifically, they must tell you how long it will take to pay it off if you just keep making minimum payments. Also, they must give you an idea of how much you would need to pay if you would like to pay off your account in 12, 24, 36 and 48 months.

Highest interest portion paid first : On your credit card statement, you may have noticed that you are charged a different interest rate for different things you charge. Cash advances typically have the highest interest rate. Balance transfers may have the lowest and purchases typically fall somewhere in the middle. Currently, if you make a payment larger than the minimum, all of that extra will go towards the lowest interest portion of your balance. The higher interest portion just sits there and draws interest every month. Under the new law, any amount paid over the minimum will now be put toward the highest interest portion of your balance instead.

No credit cards under 21 :  Anyone under 21 must now either obtain a co-signer for the card or must prove that they have the income to repay that debt. Currently, on college campuses across the US , college kids can sign up for a credit card as they get their free t-shirt. Unfortunately, financial issues are the #1 reason that kids drop out of college.  I am actually really excited about this aspect of the law because I feel like it will give young people a better chance to start off their lives without the burden of credit card debt.

Overall, I think it’s great to do away with practices such as skyrocketing interest rates and universal default because they really hit consumers when they are down.  I am also especially excited about the changes that allow young people to gain a little more financial security before giving them a credit card.  Honestly, it isn’t a great time to be in credit card debt, just because the credit card companies are struggling right now.  While the law will provide some protections from unfair practices- the best protection you can have is the one you give yourself-becoming debt-free.

 

*  *  *

 

Copyright © 2009 by Jennifer Wallis. All rights reserved.

Want more money-saving tips?  Get a FREE Subscription to our monthly newsletter!

 

 

Special Features

TRY IT FREE:  
Mvelopes Personal Budgeting System - Free Trial!

DEBT:
See if You Qualify for Debt Relief

SAVE $100s ON GROCERIES:
Print Free Grocery Coupons and Get Hundreds of Free Tips at Our Grocery Site

VISIT OUR HOME PAGE:
Read Recent Articles, Money Saving Tips and Frugal Recipe Contest Details

MONTHLY TIP REWARD CONTEST:
Thrifty Money Saving Tips - You Could Be Our Next Winner!

Order Our Frugal Cookbook

Frugal Family Recipes by Michelle Jones

Frugal Family Recipes... From
Our Home to
Yours!

FEATURED FRUGAL RECIPES
Cheap and Inexpensive Recipes for the Frugal Cook on a Budget!

FRUGAL FAMILY RECIPES:
Frugal Recipe Index & Dinner Blog...

Order Our Family Cookbook...

EDITOR'S BOOK PICK OF THE MONTH

Accidental Entrepreneur
The Accidental Entrepreneur: The 50 Things I Wish Someone Had Told Me About Starting a Business

More Book Picks...


Free Budget Help and Tips to Save Money


Help a Friend Today, Tell Them About Us!
Send an E-mail
Link to Us
Free Brochures


Try Mvelopes Personal Budgeting System for Free

Our Favorite Charities

Red Cross Disaster Relief

American Bible Society

American Cancer Society

Find More Charities and Your Local Food Banks...

 

RETURN TO HOME PAGE

Thank you for visiting with us today!  
Don't forget to sign up for your FREE SUBSCRIPTION & BONUS GIFT!

Home | About Us | Contact Us | Article Index | Free Article Reprints | Media | Advertising | Affiliates
Disclaimer | Privacy | Reader Feedback | Subscribe | Unsubscribe-Change Address

Charities & Food Banks

Copyright © 2001-2010 by BetterBudgeting.com,  a subsidiary of Blue Ridge Publishing, Inc.  All rights reserved. 

Living a Better Life® is a registered trademark of BetterBudgeting.com and it's parent company, Blue Ridge Publishing, Inc. No portion of this Web site or its publications may be reprinted without the written permission of the editor. Please ensure that any reprinting of the content from our Web sites and publications include full credit back to us with a link to BetterBudgeting.com.

Thank you for your support!!!  Have you told your friends and family about us?