I received an email today from Illyce Glink. Illyce runs the Thinkglink.com website that has a load of personal finance, real estate, consumer advice, and some pretty good tools. In the email, she outlined a few of the changes and the reactions taken by the credit card issuers.
These are as follows:
This week, more of the CARD act’s new credit card and gift card rules went into effect. Here are some of the highlights:
- Fees for late payments and other “transgressions” will be capped at the amount of the violation up to $25. Banks that want to impose higher fees will have to provide some sort of explanation.
- Banks must review interest rate hikes every six months. If the factors that prompted the rake hike no longer apply, the bank must roll back at least some of the hike – just don’t expect your interest rate to fall back to where it was.
- Inactivity fees will be banned. But banks may step up the closure of what they call inactive accounts. So, make sure you use your account.
- Gifts cards issued after Aug 22, 2010 must have an expiration date at least 5 years into the future. But, this doesn’t apply to gift cards issued as part of a rewards or liability program.
While the new gift card rules will help some, credit card companies have been working hard to discover the loopholes in the CARD act that will help them figure out how to charge their card holders more money. Meanwhile, new figures released this week show that Americans continue to pay down their credit card debt, which I think is a smart money move.
Let’s take a look at the last sentence; “Meanwhile, new figures released this week show that Americans continue to pay down their credit card debt”. While I think this is a great idea, some of the “financial brains” say that this may not be such good news.
Their thoughts are that many people are paying their credit card bills instead of their mortgages because money is tight. It seems they believe that they can miss a house payment for a month or two (or much more) if needed and not be foreclosed on, where with a credit card, they can make the minimum payments and then use the credit cards again, essentially keeping funds available if needed.
While I can understand the thought process, and in a way agree with the thinking, this is not something to cheer about. In reality, it means that homeowners are willing to sacrifice their homes in an effort to stay afloat with their bills. I think this says a lot about the economy as a whole.
If you or someone you know has run into financial issues and is unable to make their monthly payments, we may be able to offer some relief. I have a company I have worked with in the past that specializes in settling unsecured debt such as credit cards and collections. It is not an overnight fix and could hurt your credit scores if you are still paying everything on time, but for those who have multiple late payments and are already struggling, this could be a very good option.
If I can be of any assistance, please feel free to contact me at scott@nwiloanguy.com or visit my website at www.nwiloanguy.com.
Scott
Your Indiana mortgage expert specializing in FHA, VA, and USDA Rural Development loans.
