How Will the New Credit-Card Rules Help You?by Tim Manni
Lita Epstein, a blogger for WalletPop.com, sheds more light on how the new credit-card rules will positively impact consumers, all the while having the reverse effect on banks and financial institutions:
[Consumers] will be able to save money in interest payments by paying off your highest balances faster. Right now credit card issuers regularly apply your payment above the minimum balance to the outstanding balance with the lowest interest rate.
[Consumers] will get at least 45 days notice of a change in terms on your credit card to give you time to react and adjust to changes in terms and conditions.
Epstein says banks and financial institutions are likely to react by:
- Reducing the availability of credit.
- Limiting their exposure to risk with lower credit limits and higher interest rates.
- Reducing intro rate offers for balance transfers.
Epstein suggests that “The only way we can fight back is to stop using cards, even if you do have good credit.” Is giving up our credit cards really the answer? Despite receiving cash from the Treasury, many banks are still proving to be cautious lenders. What else can the government do to convince creditors that without their help, we can’t thaw from the credit freeze on our own?