Credit Card Laws What You Need To Know

Credit card laws are the laws that govern the way the credit card companies must operate. You don’t usually hear much about them. That’s because most of them are just basic laws—the type that keep anyone from doing illegal things. But credit card laws are under review and changing as we speak.

Consumers and lawmakers are trying to put credit card laws into affect that will stop the credit card companies from changing their terms at will. You might not realize it, but your credit card rate of interest can be adjusted at any time. You don’t ever have to be late on a payment.

How can they do this? Isn’t there a law preventing it? No, there isn’t. And that’s one of the problems.

If you owe money to Joe and Bob, and you’ve always paid Joe on time but you’re late with Bob’s payment this month, should Joe charge you more? Of course not. And if Joe and Bob were your friends, Joe raising your payment or your interest over a late payment to someone else would probably cause some problems.

But that’s exactly what credit card companies are doing. You can be the best credit card user in the world. You’ve never even made a late payment, and you often pay more than the minimum payment. Make a late mortgage payment or a late payment on another card, though, and see what happens.

Some of the credit card companies stopped this practice after consumers complained. Others hold to it. They can raise your rates and slash your credit line based on that late payment to someone else, calling you a credit risk. In fact, if they review your credit report they can decide to do both those things just based on how much credit you have and how much you’re using.

Credit card laws don’t stop them from raising your rate if they only think you look like you might get into debt trouble eventually. Which is basically a free pass that lets them raise rates and slash credit lines anytime they want. That’s not fair.

They also regularly deal underhandedly with consumers by charging variable rates on the way you use the credit cards. That in itself isn’t dirty dealings. But they way they handle your payments in regard to those rates are.

Say you’re getting a low rate on that balance transfer. Many cards will do that but you’re paying high interest on purchases. You know that, so you’re not bothered. When you make your payment though, where do you think they apply that payment? They lower the amount that you’re already not being charged interest on.

The amount of money sitting there charging you 18% interest doesn’t change. They automatically apply all payments to the amounts with the lowest interest rates to keep you in debt longer and paying more interest.

Many people have no idea that their payments are applied that way. Credit card laws being considered today will also remove the company’s rights to rewrite their contracts with you anytime they want.

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Aren’t credit cards and debit cards the same?

They act the same when you use them with subtle differences behind the scene.

You will find that sometimes a credit card is better than a debit card.

For example, if you desire to rent a car a credit card is a better bet.

Here is why, when a car rental company swipes your card they block out a certain amount say $500. If you use a debit card and you have $600 in the bank you now only have access to $100 because of the hold on your account. The same thing happens when you rent a hotel room or even get gas at the local gas station.

Credit cards also give you better protection if you purchase a defective product or need to dispute with a vendor. The credit card company will investigate a dispute with the company you purchased the product or service. They will put a hold on that money so you don’t have to pay that portion of the bill until it is resolved. You will not have to pay interest on that money while the dispute is ongoing.

Credit card companies sometimes give you an extended warranty on a product you purchase.

Debit cards are good for those every day purchases like groceries, restaurants, routine expenses or any place you would normally write a check. You are spending money that is in your .

Many people get into trouble with credit cards and end up ruining their credit because they fail to realize that they are spending next month’s paycheck to pay the charges accrued on the credit card unless they have the money in savings to pay off the charges. It makes it seem like you have more money to spend until the bill comes due. If you use a credit card it is always good idea to keep the balance low and pay it off every month so you don’t have to pay interest on the use of the money.

It is also a good idea to keep a small credit limit on the card so you are not tempted to spend more than you could pay back. This would lead to a monthly bill that you would have to pay every month.

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Choosing the Best Credit Card?

All About Choosing the Best Credit Card

Michael, 25 years old and working in United States for past one year was on the verge of going bald from trying to figure out the best credit card among the tons of emails that he received almost daily about the “pre approved credit cards”. Chances are that you too maybe going through the same dilemma of choosing the right credit card. As choosing the right credit card is not such an easy task as it looks at the first go, it becomes essential that you know some of the important points before you eventually purchase the best credit card for yourself.

Most of the credit cards, which call themselves as the best credit cards, come with almost the same features, offering more or less the same rate of interest. In such a case, getting the best credit card becomes even more of an ordeal for the buyer. However when the rate of interest is more or less the same, one should look for incentives offered by the various card companies in order to get the best credit card. Incentives and rewards can be of various kinds; depending on them you can opt for the best credit card. For instance you get reward points for every purchase that you make from the credit card and these points are redeemable from certain stores and outlets.

There are three main categories of cards: secured, regular and reward or rebate. Where you fall on the scale depends upon your credit history. If you’re in the process of trying to rebuild your credit, a secured card can help you achieve that. The other categories are differentiated by the types of services they afford. While reward cards generally have great perks, the higher interest rates that they normally charge can be costly if you do not pay your balance in full every month.

Then there are cash back incentives. This definitely is a strong criterion for the best credit card. According to this scheme, you get a percentage of cash back at every purchase that you make. You can also convert your redeemable points into discount for various airline flights. Most of the buyers make the mistake of thinking that the reward schemes are mostly similar whereas the difference in schemes offered by different card companies is extensive. So first of all do your research about different reward schemes and then choose the best credit card.

Nowadays banks have started offering balance transfer credit cards, which are becoming increasingly popular for people deciding on the best credit card for them. Balance transfer cards allow you to consolidate you debt onto one card, thus helping you save on interest payment, hence recommended by experts as the best credit card for debtors.

Getting the best credit card wouldn’t be a difficult task when loaded with the right information. So research about the incentives and other schemes and then only go for choosing the right credit card. It might take a little time but at least you can be sure that it’s the best credit card.

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