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May 20th, 2009

Ways to Combat New Credit Card Rules

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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.

But here’s what Kay says you can do about it:

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.

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One Response to “Ways to Combat New Credit Card Rules”

  1. Visionary Realty News » Portions of #Credit Card Reform Take Effect affecting your ability to buy the American Dream: Your home. Says: August 24th, 2009 at 7:59 pm

    [...] Although the credit card reform was designed to guard consumers against “unfair” practices, many critics have discovered several unintended consequences that could wind up working against your favor. Be sure you know the “Ways to Combat New Credit Card Rules.” [...]

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HSH.com's daily blog focuses on the latest developments in the mortgage and housing markets. Our mission is to relate how changes in mortgage rates and housing policy, as well as the latest financial news, impacts consumers, homebuyers and industry insiders alike. Our 30-plus years of experience in the mortgage industry gives us an edge as we break down the latest changes in an ever-changing market.

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Tim Manni is the Managing Editor of HSH.com and the author of their daily blog, which concentrates on the latest developments in the mortgage and housing markets.

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