Monday, 20. July 2009
Article Summary:
Wide ranging personal finance site focusing on credit information and solutions. In depth articles and counseling to help with debt reduction, relief and settlement. Get essential information on management of credit relative to loans and credit cards.This is what has happened to perhaps hundreds of thousands of other consumers, a huge credit card curve-ball. The firm sent letters to customers beginning in late June indicating that minimum payments would be raised from 2 percent to 5 percent. Consider this the opening act
Article Content:
This is what has happened to perhaps hundreds of thousands of other consumers, a huge credit card curve-ball. The firm sent letters to customers beginning in late June indicating that minimum payments would be raised from 2 percent to 5 percent.
Previously, transfer fees were capped by many banks at or . Not anymore, and the terms on low-rate offers like “0 percent for 12 months” are shrinking many last only 6 months now. The low transfer rate often dose not apply to new purchases, so consumers who switch cards for a lower rate will see their payments applied to the lowest-rate portion of the balance. This could mean consumers can find that they have swapped low-interest balances for high interest balances, leaving them back where they started after they pay off the transfer amount. Watch for the clues the may change the way your debt is controlled by your credit card company, this is the only way to Control Your Debt
Consider this the opening act in the new world order for credit card firms. Before Congress passed credit card reform legislation in July, bank lobbyists repeatedly warned that the law would cost them revenue and force them to raise rates and fees on consumers. The aggressive step of some card companies may effect a 150 percent increase in required monthly payments, marks one of the first major changes by a card issuer. The reason given is tens of millions of customers have taken advantage of our promotional low rate financing over the last five years, the bait. Then the fact that most of these loans have been paid back in less than 24 months. The hook, there have been a small percentage of customers that have not made as much progress in paying down these loans. The companies desire is to have these balances paid back in a reasonable period of time. This has caused the rate increase, card companies would work with consumers who are unable to make their new payments, but that’s merely an invitation into a lion’s den. The only offer they received are severe changes in terms to their account with a much higher, variable interest rate.
When the new federal regulations take effect next year, they will severely limit banks’ ability to change rates unless cardholders have variable-rate agreements, so banks are trying to steer consumers away from fixed-rate cards. Some card companies, recently sent notices to cardholders with fixed rates telling them their accounts will be changed to variable rates starting next month.
Consumers who don’t like changes to the terms of their current credit card can attempt to transfer balances to a new card, but this process is full-of booby traps.
Transfer fees can turn a good deal into a bad deal. A 5 percent transfer fee on an ,000 balance means a 0 fee. Consumers can choose to roll that fee into the balance of the card, making it seem relatively painless. That’s a mistake, because it can wipe out any savings from a new low-interest card.
debt elimination