The American Consumer has suddenly become the one consumed. Credit Card Debt has destroyed
|Credit Card Consumer Rights|
What is the Credit Card Bill of Rights?
The Credit Card Consumer Bill of Rights was put in place by President Obama to help protect the American consumer from predatory lending practices that have taken place in the past by the credit card industry. The Credit Card Holders Bill of Rights has created ten laws that will help protect the Credit card consumers.
The Ten Consumer Rights of the Obama Credit Card Holders Bill of Rights
- No interest rate increase for the first 12 months. In the past consumers were mislead by teaser rates or low initial interest rates that were simply raised a few short months later. Though the law or consumer right forbids a sudden interest rate increase within the first year an increase may be allowed before the one year term is up if the details of the interest rate hike are disclosed at the time of the account origination. In other words, the adjustment must be planned and disclosed ahead of time. The credit card issuer may also increase the interest rate if the cardholder is more than thirty days late on their monthly payments.
- Interest Rate Increases may not be applied to existing balances, only to future purchases. In the past consumers who took on credit card debt with the current interest rate was actually taking on debt at a much higher interest rate because the credit card companies would increase the rate in the near future and the existing balances were then charged interest at the higher rate. This misleading tactic is no longer allowed under Obama's credit card consumer protection laws.
- Interest rate increases will require 45 days notice prior to the rate increase, even penalty rate increases. In the past, only a couple of weeks notice was required to be given to the credit card holder as notification of an interest rate increase.
- No Double Billing Cycles. This practice will no longer be tolerated or legal. Consumers with credit card debt were often charged interest on balances that were already paid through a tricky and complicated billing method called double billing cycles.
- Account fee limitations to stop credit card issuers from charging up acct balances with made up fees, especially subprime accounts. Credit card lenders use to be able to charge up account balances with fees right from the get go. Now there will be a 50% limit, meaning that fees may not account for any more than 50% of the credit card limit. That's not all, the card company will only be able to charge fees of 25% of the credit limit in the beginning. Other fees will have to incurred later on in the future.
- Credit Card Bills will be issued 21 days in advance of the monthly payment due date.
- Payments received the next business day after a weekend or holiday are considered on time.
- Payments received by 5 PM on the payment due date are on time.
- Billing and Payment Disclosure - statements must include a cumulative figure disclosing the amount of interest and fees charged year to date.
- Payments over the minimum must be applied to the highest interest debt. To further clarify this means that a 100 dollar payment on a 50 dollar minimum payment will allocate the difference of 50 dollars to the highest interest debt.
Do You Have Credit Card Debt Problems?
If you have a large amount of credit card debt then you may be interested in obtaining a debt settlement agreement with your credit card creditor. Beware of the risk factors of debt settlement
There are several other options if you can't settle your debt, such as bankruptcy, that may be helpful if you need to find a debt solution for overwhelming amounts of credit card debt.