Consumer Advocates need your help! Please pass this on to others!
…help them help you...fight for credit card fairness!
The Federal Reserve Board and two other federal banking agencies have released a proposed rule that aims to reform some of the most unfair credit card tricks.
But this important new rule of fair play is just a proposal.
The banks are fighting hard to weaken the rule before it becomes final.
We have until Monday to have our voices heard to help stop abusive credit card practices.
Credit card contracts are packed with fine print tricks and traps designed to increase the likelihood of paying fees and penalties!
Beware of these common tricks and traps;
Fees and More Fees – On any given month, you
might pay a late payment fee, over limit fee, cash
advance fee, balance transfer fee, foreign exchange
fee, bill payment fee, Western Union fee, and
whatever else your lender can devise. Not to
mention monthly and annual fees.
Tricks to Make You Pay Late – These come in
many varieties. If you’re late you’ll pay a hefty fee
and your interest rate may go up. Check each
statement carefully and pay your bill as soon as it
arrives.
Changing Due Dates – Your bill will not be due
on the same day every month.
Early Due Dates – Bills may be due just a few
days after you receive them.
Weekend Due Dates – If your due date is on the
weekend and your payment arrives on the date, it
won’t be processed until Monday and you’ll be
considered late.
Morning Due Times –Your payment may be
due at 9am on the due date, not 5pm.
Approved Overlimit Charges – If a purchase
puts you over your limit, your credit card company
will approve the charge then hit you with an
over limit fee and maybe even raise your interest
rate. Keep careful track of your balance and know
that even approved charges may put you over limit.
Universal Default – Pay Card A on time but pay
late to Card B (or anything else monitored by your
credit score) and your interest rate on Card A may
jump!
“Any Time For Any Reason” Changes – Most
contracts include this ominous phrase. It means
just what it says – they can increase your interest
rate on a whim.
Teaser Rates That Don’t Stick – An introductory
0% interest rate can jump to 30% with a late
payment or if you go overlimit. Don’t bank on
keeping that 0% rate for the entire promotional
period.
Retroactive Application of Higher Interest
Rates – To make things worse, if your interest rate
increases, they can apply the higher interest rate to
the entire existing balance, not just to new charges.
Allocation of Payments – If you end up with two
or more different interest rates, they will apply
your payments to the balance with the lower
interest rate first. The rest of your balance will
continue to generate high interest charges until the
low-rate balance is entirely paid off.
Tricky Interest Calculations – For some cards,
you can pay interest on purchases from previous
cycles. This is known as double cycle billing.
Look for a card that uses the “Average Daily
Balance” interest calculation method.
Credit “Protection” – Services like this may
sound good, but they’re usually useless. The fee
for the service likely exceeds the minimum
payments it would cover if you became sick or lost
your job. Avoid add-on products like this.
Binding Mandatory Arbitration (BMA) – This
provision requires that you resolve any conflict
with an arbitrator selected by the lender, which
means you give up your right to take the credit
card company to court.
When those who profit also write the rules we must play by, the cards are often stacked against us. It's time to play fair...Don't let the banks win!
Please Tell the Feds about your experiences Before Monday!
The proposed rule includes these important credit card reforms:
- Gives you more time to pay. A payment can't be treated as late for fees or negative credit reporting unless the bill was mailed or delivered to you at least 21 days before the due date. This helps end card companies' ever-shrinking repayment periods.
- Ends tricks that increase your finance charges. Card companies routinely require you to pay off low-interest balances (like transfer balances at teaser rates) before allowing you to touch higher-interest debt (like new purchases). That's never in your best interest. The rule requires that your payments must be allocated to give you the full benefit of a discounted promotional rate.
- Prohibits rate increases on your existing balance. Today, when a card company jacks up your interest rate, for whatever reason, it applies that rate hike to your current balance. Under the new rule, rate increases can be applied to your prior balance only if you have a variable rate card, your promotional rate expires or is lost, or you pay your bill more than 30 days late.
- Eliminates hidden interest charges. Today, some card companies charge interest even on debt repaid during the grace period. The proposed rule would end that.
If you think these reforms should be implemented, please go to AFFIL.org and learn more about the proposed rules. Unfair credit card practices hurt Americans and our economy!
You can fill out a simple form here to send an e-mail to the Federal Reserve Board sharing your opinion or your own experience with harmful and costly unfair credit card practices.
For more info click here!
