Credit Card Interest Rates Increase – Can Debt Consolidation Save You?
Ask A New Horizon Credit Counseling
Fort Lauderdale, Florida –With the new Credit Card Act in place what does this mean to consumers? Consumers may now see a return to annual credit card fees. Although the new Credit Card Law restricts certain fees, such as those charged for surpassing credit limits or paying credit cards late but there are plenty of other charges that remain fair game. We may start seeing credit cards ramp up additional fees. For instance, Fifth Third Bank last year began charging some cardholders $19 for not using their cards for 12 months. There is NO LIMIT to how high annual percentage rates can go. Some banks have raised interest rates to record levels weeks before the new laws went into effect.
According to CreditCards.com Weekly Credit Card Rate Report the national average interest rate on new credit card offers hit 14.62 percent. This increase in the interest rates was the highest since they started tracking in 2007. Six months ago the average was 12.7% and now it’s 14.6%.
Not only are the banks raising rates to restore the profits they might be losing, they have also started changing some of their card products to variable rates from fixed rates. Many of the largest issuers, including Bank of America and Chase, switched their customers over to variable rate cards in 2009.
Some other things you should know about the new Credit Card Act are:
• Late payments before the 60 day window will not increase your interest rates, but it will still show up negatively on your credit report.
• You should now open your credit card statements quickly and review them to keep abreast of new terms.
• Some of the credit cards may have deadlines that you must meet to opt in or out of to get certain terms.
• The new Credit Card Act does not cover Business and corporate credit cards.
• The Credit Card Act does not cap interest rates. The increased rate can still triple your existing APR.
• A rate increase can’t be applied to existing balances unless cardholder is delinquent.
• Cardholders must be notified of a rate increase 45 days in advance, but there is no cap on rates.
• Those under 21 can’t apply for a credit card unless they have a co-signer, sufficient income or show proof that they have an independent means to repay the card debt themselves.
With banks trying to use every loophole they can find to help their bottom lines, it will be the consumer who will still suffer. If interest rates have already increased and annual fees are reinstated, how will the consumers get themselves out of the financial hole they may be in?
A New Horizon Credit Counseling may be the solution and help with Debt Management, Budget Management and Credit Counseling. A New Horizon is a well established Credit Counseling company with over 15 years experience as a non-profit organization assisting individuals and families from all walks of life in both maintaining control and regaining control of their finances. This is accomplished utilizing Credit Counseling, Budget Training and a host of solution oriented programs and services to counsel and educate individuals on the responsible use of credit along with a structured debt management plan to assist them in paying off their existing debt. This is all offered in the strictest of confidence by certified financial counselors whose goals are to assist you in becoming debt free. Contact A New Horizon – http://www.anewhorizon.org for more information.