The new rules governing credit card debt are having a positive effect

[Jan 23, 2011.]

 

Here is a quick recap of some of the rules that the Federal Reserve put into effect regarding credit card debt in February 2010:

• When your credit card company wants to raise your interest rate, or other fees, they have to give you 45 days' written notice, and you have the option to close the account before any changes take effect.


• The new credit card statements have to give you the calculation for how long it will take to pay your balance in full using only the minimum payment. The statements also have to give you the payment you need to make to pay the balance in full in 36 months.


• Your interest rate cannot increase for the first 12 months when you get a new credit card (exceptions apply).


• You are now able to opt out of over-the-limit transaction approvals. Such transactions usually carry a fee. If you opt out of your transactions being approved when you are over the limit, you may suffer some embarrassment if your card is denied, but you won't owe the bank a fee.


• Applicants under the age of 21 must prove their ability to repay what they borrow. In other words, if the young borrower does not have a job, the credit card company cannot give them a credit card.

Each of these new rules was designed to help consumers get out of debt. Here it is about a year later, and the results are that, yes, in fact, many people have found debt relief.

Contact a debt relief specialist now.

Every month the Federal Reserve releases its G.19 report on consumer credit. Revolving credit decreased at an annual rate of 6.3 percent in November 2010. Revolving credit has been steadily decreasing at an average annual rate of about 5.0 percent since the Federal Reserve's new rules went into effect. It is hard to conclude if the Fed's rules are at all responsible. But, the statistics show that people are on a path to get out of debt. The new rules help raise awareness and limit credit card company abusive practices. Better awareness and a fair playing field are giving Americans the chance they need to find debt relief.

 

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.