President Obama has done well in his latest act of recovery. What exactly is The Credit Card Bill of Rights? It's a sigh of relief.
Let's break it down:
1. Universal defaults are now history. Now, you don't have to worry about paying Mr. Smith on his tenth collection call without making Mrs. Green raise your interest on your other credit card on her first collection call. The bottom line is that there will be no more credit card companies sticking their noses into your business with the other creditors when it comes to missed and late payments.
2. Cardholders will have more time to pay up the change needed to satisfy the bill. How does at least twenty five days sound? It sounds like I've got time so I can collect change from under the seats in the couch and on the bottom of the floor of my car, take it to a coin machine, and pay that measly $20 to $50 a month.
3. At least forty-five days prior to, if a rate changes, there will be notification. This sounds good, right?
4. Credit card consumers now have the right to select a threshold to their cards. Those who go over the limit and pay the extra fee because of "accidents" can benefit from this.
5. Double-billing cycles demolished. If you swiped that card at Victoria's Secret last month, paid it off and swiped it again this month because you realized you needed that 5 panties for $25.00 or that bikini that went on sale during the semi-annual event, you won't be charged today's interest rate based on last month's activity.
6. Payment is due by 5:00pm eastern time next month. Can you adhere to that? Many companies already go by this rule. Anything that is delivered by this time is on time.
7. The unlimited possibilities that credit card issuers insinuate in their pamphlets has ceased. Bravo, Mr. President. No one did like that whole "We can trap you with any rates, any time, on our terms, because we said so." type of phrases in the disclosures. Anytime that does happen, we get the rights to bail out and pay off whatever balance we have left at the existing rates we originally were paying. (Arbitrary Rate Increase).
8. Here's the odd ball rule out of all of them: Anyone under 21 must provide means of providing for debt when applying for a credit card or a guardian/co-signer applicant must be involved. Ok, the last time I checked, some parents did do that already with their children and we can't forget MTV's Sweet 16 celebrants whom even at fifteen years old are running around with credit cards. However, this does eliminate the student credit card when a particular eighteen year old decides to open a credit card and thinks they really need a new wardrobe for the Spring semester and can't pay it off. Their credit score then goes off the edge, falls below, and then they end up hurting later on. But truthfully speaking here, there isn't much that's going to change because of this reenforcement. Let's see, if Jen gets a day job and gets a credit card approved because she has had savings, a checking, and plans to maintain a good balance next to nothing or nothing on her credit card; however, Jen loses her job and she does live on her own as she goes to college then her parents can't provide the means to pay off her debt - that means she's pretty much stuck with it. There's all sorts of scenarios that can happen with or without this rule.
9. Got an awesome rate on your credit card? It will be guaranteed to last at least six months. That should be enough time to cover up your tracks that one time you went to Las Vegas right?
10. Consumers will have a 30-day notice before their accounts are closed.
Healthy Tips for Credit Card Consumers:
Pay your bills on time. Not only is this good for your bank account by not paying late fees and hiked up interest rates, your credit score will benefit as well. The better your score is, the less expensive is will be to finance things in the future such as that brand new car or the home you've been saving up for. No one really wants to pay double on that mortgage just because you were late a few times on that small $200.00 statement with a minimum payment of $11.00.
Shop credit card rates before you click on that pretty one with the picture of the beach. Just because it looks good in your wallet doesn't mean you should partake in the offer. Signing up for a credit card alone pulls an inquiry on your credit report. Not using it thereafter, hurts it even more. So that Hello Kitty card looks adorable, does that mean you'll pay $1.50 for a hot dog and then pay an extra quarter two months later when it's long digested and processed through the drain and sewer? Yeah, that's a disgusting thought. So is overpaying for something.
If you know you owe money and can't afford to pay the bill, call them. Let me repeat that. CALL THEM. Who? The creditors. If they are calling you, pick up the phone - immediately. Believe it or not, customer support agents are there for a reason. If you let them know that financially you're unstable for the month and making that payment would hurt you, they want to know that. What they don't want to know is that you bought a new bedspread, ran up your phone bill, and got a new dog you have to feed. They only need to know that if and when you're broke, you'll arrange to shell out a couple nickels as opposed to the hundred dollars they're asking for or if they're considerate, they'll even waive it this month and let you pay next month. The most irresponsible thing to do is leave them hanging. The last thing you want is a judgement for collections on your credit report or even worse, hearing from a collection agency that is working with an attorney that could possibly sue you for non-compliance.
You shouldn't ever charge up more than you know you can pay for. Credit cards are expensive. It's money you are borrowing to pay for, remember that. Many people have the idea that it's free money and they toss it aside. That's a No-No.
Got quite a few credit cards? Transfer them all into one card, consolidate them to the one card that gives you back the most rewards. For example, if you have that American Airlines card you're paying a fee for anyway per year, why not transfer all the balances, earn the mileage, and pay it all off at the same time or that American Express that mails you a check for cash rewards at the end of the year? That way, you don't have to worry about one being due on the 5th, one being due the 13th, and then losing the envelope to the other one you thought was due the 25th but was really due the 4th.
Lastly but certainly not the least of them all, if you really don't need a credit card - don't. Think twice before you open an account. I've seen way too many people fall into debt, despair, and challenges because of them. It's ideal to have one or two and that's to reserve in case of emergencies. It's enough to know they're there. Anything in excess to that will be harder to tame if you really are hating your minimum pay day job right now and clubbing every weekend.
According to CreditCard.com, the average household balance on credit cards are $10,600.
Let's break it down:
1. Universal defaults are now history. Now, you don't have to worry about paying Mr. Smith on his tenth collection call without making Mrs. Green raise your interest on your other credit card on her first collection call. The bottom line is that there will be no more credit card companies sticking their noses into your business with the other creditors when it comes to missed and late payments.
2. Cardholders will have more time to pay up the change needed to satisfy the bill. How does at least twenty five days sound? It sounds like I've got time so I can collect change from under the seats in the couch and on the bottom of the floor of my car, take it to a coin machine, and pay that measly $20 to $50 a month.
3. At least forty-five days prior to, if a rate changes, there will be notification. This sounds good, right?
4. Credit card consumers now have the right to select a threshold to their cards. Those who go over the limit and pay the extra fee because of "accidents" can benefit from this.
5. Double-billing cycles demolished. If you swiped that card at Victoria's Secret last month, paid it off and swiped it again this month because you realized you needed that 5 panties for $25.00 or that bikini that went on sale during the semi-annual event, you won't be charged today's interest rate based on last month's activity.
6. Payment is due by 5:00pm eastern time next month. Can you adhere to that? Many companies already go by this rule. Anything that is delivered by this time is on time.
7. The unlimited possibilities that credit card issuers insinuate in their pamphlets has ceased. Bravo, Mr. President. No one did like that whole "We can trap you with any rates, any time, on our terms, because we said so." type of phrases in the disclosures. Anytime that does happen, we get the rights to bail out and pay off whatever balance we have left at the existing rates we originally were paying. (Arbitrary Rate Increase).
8. Here's the odd ball rule out of all of them: Anyone under 21 must provide means of providing for debt when applying for a credit card or a guardian/co-signer applicant must be involved. Ok, the last time I checked, some parents did do that already with their children and we can't forget MTV's Sweet 16 celebrants whom even at fifteen years old are running around with credit cards. However, this does eliminate the student credit card when a particular eighteen year old decides to open a credit card and thinks they really need a new wardrobe for the Spring semester and can't pay it off. Their credit score then goes off the edge, falls below, and then they end up hurting later on. But truthfully speaking here, there isn't much that's going to change because of this reenforcement. Let's see, if Jen gets a day job and gets a credit card approved because she has had savings, a checking, and plans to maintain a good balance next to nothing or nothing on her credit card; however, Jen loses her job and she does live on her own as she goes to college then her parents can't provide the means to pay off her debt - that means she's pretty much stuck with it. There's all sorts of scenarios that can happen with or without this rule.
9. Got an awesome rate on your credit card? It will be guaranteed to last at least six months. That should be enough time to cover up your tracks that one time you went to Las Vegas right?
10. Consumers will have a 30-day notice before their accounts are closed.
Healthy Tips for Credit Card Consumers:
Pay your bills on time. Not only is this good for your bank account by not paying late fees and hiked up interest rates, your credit score will benefit as well. The better your score is, the less expensive is will be to finance things in the future such as that brand new car or the home you've been saving up for. No one really wants to pay double on that mortgage just because you were late a few times on that small $200.00 statement with a minimum payment of $11.00.
Shop credit card rates before you click on that pretty one with the picture of the beach. Just because it looks good in your wallet doesn't mean you should partake in the offer. Signing up for a credit card alone pulls an inquiry on your credit report. Not using it thereafter, hurts it even more. So that Hello Kitty card looks adorable, does that mean you'll pay $1.50 for a hot dog and then pay an extra quarter two months later when it's long digested and processed through the drain and sewer? Yeah, that's a disgusting thought. So is overpaying for something.
If you know you owe money and can't afford to pay the bill, call them. Let me repeat that. CALL THEM. Who? The creditors. If they are calling you, pick up the phone - immediately. Believe it or not, customer support agents are there for a reason. If you let them know that financially you're unstable for the month and making that payment would hurt you, they want to know that. What they don't want to know is that you bought a new bedspread, ran up your phone bill, and got a new dog you have to feed. They only need to know that if and when you're broke, you'll arrange to shell out a couple nickels as opposed to the hundred dollars they're asking for or if they're considerate, they'll even waive it this month and let you pay next month. The most irresponsible thing to do is leave them hanging. The last thing you want is a judgement for collections on your credit report or even worse, hearing from a collection agency that is working with an attorney that could possibly sue you for non-compliance.
You shouldn't ever charge up more than you know you can pay for. Credit cards are expensive. It's money you are borrowing to pay for, remember that. Many people have the idea that it's free money and they toss it aside. That's a No-No.
Got quite a few credit cards? Transfer them all into one card, consolidate them to the one card that gives you back the most rewards. For example, if you have that American Airlines card you're paying a fee for anyway per year, why not transfer all the balances, earn the mileage, and pay it all off at the same time or that American Express that mails you a check for cash rewards at the end of the year? That way, you don't have to worry about one being due on the 5th, one being due the 13th, and then losing the envelope to the other one you thought was due the 25th but was really due the 4th.
Lastly but certainly not the least of them all, if you really don't need a credit card - don't. Think twice before you open an account. I've seen way too many people fall into debt, despair, and challenges because of them. It's ideal to have one or two and that's to reserve in case of emergencies. It's enough to know they're there. Anything in excess to that will be harder to tame if you really are hating your minimum pay day job right now and clubbing every weekend.
According to CreditCard.com, the average household balance on credit cards are $10,600.
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