Beware Of Credit Card Changes

As many credit card holders know, changes resulting from the CARD Act will become effective on February 22, 2010. With a little less than a week before new regulations restrict how credit card companies conduct business, it is important to review just what changes are taking place. The credit card industry is one which enjoys billions of dollars in profits each year. Despite the fact that new rules and regulations are going in place to protect the consumer, you can bet the credit card companies will do their best to make up lost revenue in other areas. Here we look at three important changes you must be aware of to avoid paying more than you should on credit card purchases.

• Loopholes- The Credit Card Accountability, Responsibility and Disclosure Act (CARD) was enacted to add protection for consumers in a highly unregulated industry. Unfortunately there are several loopholes in the law that can end up costing you more money. One such loophole is in the provision for advance notification. In this provision, card issuers must give advanced notice, 45 days to be exact, for significant changes in terms. This included fees and finance charges. Credit card companies are not required to give advanced notice on credit limit decreases, rate hikes due to payments that are 60+ days late or the expiration of promotional rates. This means it is up to you the consumer to pay close attention to every detail on your credit card statement to avoid paying more money.

• Over the limit- In order to be charged an over the limit fee you must give permission to allow over the limit transactions. If you do not give your permission to allow over the limit purchases, it does not mean necessarily mean a transaction that would put your account over the limit will be denied. If this situation occurs you would have grounds to deny the over the limit fee. If you opt to allow over the limit transactions on your account, you must be informed of the over the limit fee and are only allowed one over the limit fee per billing cycle.

• Annual Fees- Despite speculation that annual fees will become more prevelant as a way to boost revenues, their reappearance has been on the slow side. With that in mind, understand that your credit card issuer can implement an annual fee at any time as long as they provide advanced notice.

Many of the changes taking place within the credit card industry will help consumer moving forward. If you currently have large balances, you are advised to pay down your debt as quickly as possible to avoid being at the mercy of the credit card companies. In the meantime, managing your credit responsibly and paying close attention to every piece of information provided by your card issuer will help you avoid additional fees and penalties that are still a factor.