The Government is trying to curb these outrageous FEES that come with having credit card with a new credit card reform bill, but is this going to stop the credit card companies from sticking it to you on the low low……if you don’t pay attention.
Here is the NewZ: In an effort to curb these abusive practices, President Obama signed into law a credit card reform act in May that’s rolling out in three parts over 12 months.
The first part of the law, which took effect in August, requires banks to give customers more notice ahead of major changes to their accounts, like rate hikes. Starting in February, limits will be imposed on when issuers can raise rates on existing card balances, and on new cards. In August 2010 some credit card penalty fees will be will reined in.
But no legislation can fully shield consumers from the credit card industry’s ongoing efforts to boost the bottom line.
The worst part? “All of these hikes are taking place simply because they CAN,”
Watch out For:
1. Rate Hikes
As of February, issuers won’t be able to arbitrarily raise rates on existing balances. But cardholders will still be subject to interest hikes for late payments and various other infractions. And card companies will be able to raise their rates as high as they want, whenever they want, on future purchases even after the reform bill kicks in completely.
Consumer outrage is boiling over. Last month, a disgruntled Bank of America customer posted a YouTube video complaining her bank “jacked up my interest rate to a whopping 30% APR.” Her rant went viral, and BofA dropped her rate back to its original 12.99%
2. FEES, FEES, FEES
Fees aren’t just rising — they’re multiplying. Cardholders are getting slapped with fees they’ve never seen before. The hitch: New laws can address only existing fees and business practices; they can’t predict what credit card companies will do in the future.
BofA spokeswoman Betty Riess said the fees are part of a company test that affects 0.5% of all consumer accounts, and that the fees range from $29-$99.
Fifth Third Bank recently introduced a $19 inactivity fee for customers who don’t charge anything for 12 months, and Citibank is hitting some consumers with a fee if they put less than $2,400 on their card annually.
3. Higher Monthly Payments
Banks are also demanding bigger and bigger minimum payments. Chase has bumped up the minimum payment for some consumers to 5% of the monthly balance from 2%.
For someone who carries a $5,000 balance, that means the monthly payment of $100 skyrocketed to $250 — a whopping 150% increase.
4. Fewer Rewards
“This is happening with a significant amount of cards,” Hardekopf said, adding that many consumers are now receiving 1% cash back instead of the 2% or 3% they once enjoyed.
American Express recently cut its Blue Card’s cash back policy from 1.5% to 1.25%. And all AmEx customers who make a late payment will no longer accrue points on their purchases — however, those points can be reinstated with a $29 fee.
5. Slashed Credit limits and Cancelled Accounts:
Without so much as a call from the bank, some customers are learning their credit limits have been slashed by as much as 75%, or that their accounts have been closed altogether, according to the Center for Responsible Lending’s Josh Frank.
Citibank recently closed what a spokesman called a “limited number” of MasterCard gas cards co-branded with class=”hiddenSpellError” pre=”with “>Citgo, ExxonMobil, ConocoPhillips and Shell. So Don’t Be shocked when you so and use your credit card and it doesn’t work, companies can cancel your card without telling you.
WHAT YOU CAN DO….
READ YOUR CONTRACT!!!!!
Shop around if you don’t like the terms on a credit card
Look at your finances if you KNOW you CAN’T afford it DON’T DO IT!!!!
Hope this helps Folks Look OUT!!!!
YOU’VE BEEN WARNED!!!!