Help Me Get Out of Debt!
How many times have you simply wanted someone to help you get out of credit card debt? If you are like most people, you have lost count of the number of times you promised yourself that you would stop using your credit card so much. After a while, it is simply easier to blame the ‘evil’ credit card companies for all of your problems. If they would stop charging you so much money in interest, fees, and penalties, after all, you wouldn’t be in the mess you are in…right?
Unfortunately, the credit card companies are not the real reason you are struggling with credit card debt; your spending habits are. While it is certainly true that the government wants you to spend money to stimulate the economy, they also want you to pay off your credit card debt in a reasonable fashion. In fact the Credit Card Act, also known simply as The Act, was passed in 2009 as their way to help protect consumers from the credit card companies and their propensity to increase their rates and fees.
The Act was implemented in three distinct phases; the last being effective as of August 2010. A few of the more notable elements are listed below.
Consumer Protection Laws Simplified
Increased Notification – Prior to the Credit Card Act of 2009, creditors were required to give only 15 days notice to their customers that they were raising their interest rates or fees. The Act now stipulates that they must give the consumer at least 45 days notice before any changes become effective.
Increase Postage Delivery – I don’t know about you, but in the past it always seemed as if I received my credit card bill on the day it was due. Credit card companies were, in fact, required to mail your bill 14 days before it was due. Thanks to The Act, however, credit card companies must now ensure that your bill arrives at your house 21 days before it is due.
Ability to Opt Out – Another thing I hated about my credit card company was the fact that they could increase my rate whenever they wanted and I could do nothing about it. Now, card holders have the option of opting out of any rate increase. You may not be able to continue to use that credit card but at least you are not forced into paying a rate that you did not agree to.
Retroactive Application of Rate Increases is Disallowed – As mentioned previously, it always seemed unfair that the credit card companies could increase my interest rate and then apply that rate to old purchases. I may not have purchased as much if I knew beforehand that the rate was going to be so high. Fortunately, the Credit Card Act of 2009 addressed this issue.
Now, as long as my account is not more than 60 days past due, the new rate cannot be retroactively applied to my old purchases. It can only be applied to my new credit card purchases. If, however, the account is more than 60 days past due, the credit card company is free to apply the new rate to any outstanding balance. The consumer can get the old rate back by making the minimum payments on time each month for the next six months.
The Credit Card Act of 2009 was designed to prevent creditors from taking advantage of their customers. Despite the fact that this legislation is a step in the right direction, consumers need to be more actively involved in their own personal finances. Yes, it is possible to find credit cards for people with bad credit, however, financial knowledge is the key to winning with money!