The credit card bill will soon be active in a few months. With the bill in place, credit card holders are finally going to see their credit companies take on a semblance of fairness when dealing with them. Or will they?
Set to become active next year, on February, the credit card bill may be coming in too late. The release of the credit card bill may have been met with widespread approval by credit card holders and their supporters but the credit industry positively loathes it, and with good reason. The credit card bill is going to bring a lot of legislations which is going to change the way credit companies run their business. Most of these changes are aimed towards benefiting card holders, an unfamiliar situation for the credit industry which has traditionally seen all out support from government, even when they were passing practically Machiavellian legislations for themselves.
The credit card bill is going to keep interest rates much more affordable for card holders. A card holder who fails to pay off his or her bills on time may get an interest hike but credit companies are required to monitor him and review his status every six months. If he begins to pay off his bills on time and the circumstance requiring the rate hike is no longer necessary, then the hike is removed. Credit card holders will also get better transparency from their credit companies. The lack of transparency in credit adjustments, agreements and billing language has long been one of the most controversial ways that credit companies collect fees from customers.
For instance, Bank of America recently issued to their customers fine print notices which informed them that their low rate credit cards will be getting a much higher interest rate. Customers can opt out of the deal if they reject the increase. The window of time that customers have to reject the interest rate increase is relatively small too, so if they missed the notice in the fine print when it arrived, they would likely get the higher interest rate before they could opt out.
This is actually a common tactic for credit companies. Another common example is the much-debated minimum monthly payment. The minimum monthly payment is the smallest payment a card holder can pay to his credit company to ensure that he can continue using his credit card without being cut off from credit. The problem with minimum amount payments is that a larger part of the amount goes to paying interest rates and fees rather than paying off the debt. As a result, the credit card holder pays his debts longer and ends up paying more as well.