On its surface, introducing new credit card regulations to clamp down on abusive practices seemed a clear-cut solution. Once new credit card regulations take effect, so went the thinking, borrowers would no longer be fair game.
Sudden interest rate hikes, exorbitant fees and some other annoying credit card “features” have been tamed by new regulation. But as banks are phasing out outlawed fees, they are putting in place a new type of fee which is still legal.
Use it or lose it!
Using credit cards for emergencies only is no longer an option. “Use it or lose it” is the new credo of credit card issuers. Now that banks can’t charge inactivity fees to improve profitability they now simply close idle accounts.
Whoever piled on huge amounts of debt on their credit cards is being watched carefully. Should the risk profile of a card holder rapidly deteriorate, they will get a fair warning before the lender can hike the rate. Changes to your interest rate must be announced at least 45 days in advance. On the flip side, banks may not be willing to extend credit when in doubt, given that they can’t get paid for any additional risk for as long as one and a half months.
Forget paper statements, go digital now
Don’t wait for printed bank statements in the mail. Of course you still have to check thoroughly all the mail from your bank(s), but in most cases you can stay on top of your bank accounts with your Mac or PC, iPhone, BlackBerry or Android smartphones.
Online banking and budgeting tools are now en vogue. Comparing prices and fees in this changing landscape is a must, too:
But for many distressed Americans, credit card debt might be more than they can afford right now. Many families have been paying down their card debt aggressively. Still many homeowners have now only negative equity but also more revolving debt on their hands than they can possibly handle. If you are in this category start paying down bad debt immediately. Start with the debt which you can pay off the quickest while keeping up minimum payments on everything else, and once you wipe it out, apply the payment to your next debt, and so on. Forget the interest rate. The fewer balls you need to keep in the air, the easier your financial life will be.