All the buzz today is about the new credit card rules and how this is going to be a great thing for consumers…blah, blah, blah. While I think these rules are a step in the right direction, I don’t think they are the solution to many credit card problems that exist. However, since they will affect many people, they are worth mentioning here. Here are a few of the new credit card rules that I found interesting.
The age requirement. Awesome. In the past you only had to be 18 to get a credit card on your own. Thanks to the new credit card rules, you need to be 21—unless you have a cosigner or can prove your ability to repay your credit card debt.
My husband and I personally got into credit card debt way before we turned 21. Me, I was living on my own way before then and credit was a huge crutch for me when money was tight. Yes, credit cards helped me stay afloat, but in the long-run they did more damage than anything. I do believe there are tons of responsible 18 year olds that can handle credit, but there are many more that probably can not. They end up wasting their young adult life (hmm, hmm like yours truly) trying to dig out of debt.
You are given more time to pay. Instead of 14 days, you now get 21 days. However, my view is if you don’t have the money in 14 days, will ya have it in 21? Maybe, maybe not.
Creditors need to give advance notice to hike your rate. We all have probably dealt with this before. I know I have. Banks loved to hike your interest rate up for the stupidest reasons, and sometimes for no reason at all. Of course, if you don’t agree to the rate hike, some creditors may close your account. Yeah, that’s a downside to this rule. If you recently have been notified of a rate hike, do your research before committing.
There are fee restrictions. You know the fees these credit card companies love to charge. There are some new restrictions to over-the-limit fees, late charges, and more. It is a good idea to read these rules over to educate yourself on the changes.
What paying the minimum payment is getting you. Yes, creditors now need to provide you with a disclosure along with your monthly statement that shows you exactly how long it will take you to pay off your balance if you only make the minimum payment. This is by far my favorite! You will clearly see that making a small $62.50 minimum monthly payment for that $2500 plasma TV @ 18% interest will really cost you. Yup, that $2500 TV will take you 204 months to pay off! Totaling over $3,173.22 in interest alone. By then, that TV will probably be long gone, and you’ll still be paying on it.
I have turned into a real numbers person after my deal with debt and seeing that stuff just blows my mind.
These are just some of the highlights of the new credit card rules. I could write about this stuff for hours, but luckily they are already online for you to see. I did a lot of reading on the new credit card rules and found this article very informative. It is located on creditcards.com
Happy reading!
Tags: new credit card rules
