New credit card Rules go into effect Today. The rules are designed to protect consumers, but credit counselors say the changes will have both positive and negative repercussions.
Starting Monday credit card issuers must now give consumers 45 days before spiking interest rates. Also, consumers now have a minimum of 21 days after the close of each billing cycle to pay off a balance. AND if you pay more than the minimum on your balance, that payment must be applied to the highest interest rate balance first.
Those changes and more will cost banks an estimated 11 billion dollars each year and lenders are looking for new sources of revenue.
"Credit card companies are going to be losing some income. But they'll start looking at every fee that they can increase. You know they'll be increasing fees. Annual fees, you'll see those go up," said Irma Whitten, Consumer Credit Counseling CEO.
Credit counselors say interest rates will be higher across the board and it will be harder for people to get cards. They predict limits will be lower.
Your monthly billing statement will look different too. They'll show you how long it will take to pay off your debt by only paying the minimum each month. That will be contrasted against becoming debt free in three years. If you're having trouble paying your bills, credit counseling may also be a good option.
For a list of all the new rules, click this link to the Federal Reserve's website.
http://www.federalreserve.gov/creditcard/------------------------------
I said Eff it and paid off my final credit card last week. Not going to be a slave no more.
