Ways to Combat New Credit Card Rulesby Tim Manni
The House’s approval of the credit card bill today sends the legislation straight to President Obama’s desk for his signature, which could come as soon as Memorial Day.
Yesterday we reported how this credit-card reform could have an adverse affect on responsible credit card holders. Financial expert Ellie Kay has offered some ways to combat the changes the card reform could bring.
Credit card companies and banks are beginning to shift their focus to responsible borrowers in order to make up for the billions they are expected to lose once the new rules take effect.
Kay says the new rules will impact the 50 million responsible card holders with annual fees, higher annual percentage rates (APR), reduced credit limits, new due dates, and hidden fees.
Call: “When you receive notification of higher APRs, lowered limits or annual fees be prepared to call the credit card company and do what you can to try to get back what they have taken away from you.”
Be Careful When Canceling: “Do NOT cancel your major bank card just because they’ve added an annual fee.” Canceling your credit card can seriously damage your credit score. “If you’ve had the card for 5 or more years and cancel it, then your longevity is affected in your credit scoring. So be strategic in what you cancel and when.”
Know Your Terms: It has always been essential to read and understand the terms and conditions of your contract. Kay reiterates that if you don’t understand any of the terms or conditions, call your credit card company and have them explain it to you.
Be Creative: “With the reduction of reward perks and cash back savings, it may be time to look outside your own credit card for rewards on the items you purchase. For example, at the site Upromise.com you sign up free and get anywhere from 1% to 25% deposited into a 529 savings plan for items purchased.” Also, be sure to research (now and in the future) competing companies for the best rates, terms, rewards, and points.