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Despite new laws, keep your eyes open with regard to credit card debt

[Oct 28, 2010.]

 

A need for better legislation

Debt, including credit card debt, just about sent the American economy into the abyss recently. Outraged Americans pounded their fists and demanded that Congress do something to legislate safeguards to improve the hazards associated with financing options. Congress acted, and the end result was the Credit CARD Act, an extensive overhaul of the laws that regulate the financial industry. Included in the overhaul were new credit card rules which went into effect Feb. 22, 2010.

What the new credit card rules include

  • You must be notified in writing, at least 45 days in advance, before your interest rate can be increased.
  • Your statement must show you how long it will take you to repay your debt making only the minimum payment. And, it must give you a payment that pays off the debt in 3 years.
  • Anyone under 21 years old has to prove their ability to repay the loan before they can be issued a card. No more preying on the college kids!

New legislation only helps so much

BEWARE! Do not fall asleep at the wheel. Yes, there are new laws in effect that make reading your credit card statements easier and prevent lenders from raising interest rates without notice. But, credit card agreements are very tricky -- on purpose -- and you need to be willing to read the fine print. Or, better yet, just get out of debt.

What legislation can't do

The problem with legislation is that it's influenced much more by hindsight than by foresight. Credit card debt companies are crafty. As soon as Congress makes a law to stop them in one direction, they turn and go in another. It would be impossible to legislate every possible pitfall a consumer may face. Legislation can only try to prevent the mistakes of the past from happening again.

Get out of debt....there is no substitute

The safest relationship with credit card companies is to owe them no money -- period. Check out consolidation loans or a debt settlement program if necessary. If you can't pay the debt off alone, get help. Experts in debt relief can lead you to a place where credit card company tricks "can't touch ya."

 

About Author:

Renee Morgan has been a loan officer for over eighteen years. She is also a freelance writer and guest expert for radio and TV.

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