Credit cards are a part and parcel of our lives now. Using credit cards has become second nature for me. Paying up my dues in time was something that I learnt as a child and I maintained that habit even with credit cards. So there were no hassles for me. The operations were smooth and I really had no problems with their rules. I understand there are many like me, but some have problems with the billing period, interest rate notifications, finance charges adjustments, late payment adjustments etc. The Obama government has brought in changes in the way credit card companies operate with their consumers through the Credit Card Accountability, Responsibility and Disclosure Act 2009. Though the changes are welcome to a certain extent, there are some pros and cons that need to be considered before you actually rejoice.

A change that you might welcome is no sudden increase in interest rates or credit cuts without warning. You’ll be notified of such changes before hand by your credit card company. You will be warned beforehand of any big changes associated with your accounts and you’ll be given a greater period of time for paying up your dues. This is a welcome change. Something that has made me sigh in great relief! The other benefits of this new act also ensure protection for students from card companies. Unfair fee transaction prohibition and clear communication are some other advantages. These are some of the broad benefits that you can expect to see in the future.

On the flip side, credit card companies have prepared themselves for the new laws. Some of them have been sending notifications about increase in interest rates and other fees before hand. Now with the new law, your payments have become no less. You are either paying the same amount or rather more. The only difference is that you’ll be informed beforehand and who wants to hear about a fee hike beforehand in this economically not so good period? Citi, for example, wants to increase its annual fee by $30.  Now I wonder how many of us were looking forward to that.

Interest rates have not been lowered. It’s only that even if they are hiked you’ll be notified beforehand. Does this advance information actually help? I guess ultimately it will turn out to be the same. Your income does not rise in the same rate as your interest rate ! The people who always maintained a good credit history are not benefited by the new rules.

The rates of American Express, Citi and other cards have risen to adjust to the new rules. Though the new rules have made the terms and conditions more comprehendible for customers, the customers are not actually benefited. They are only coming to know what they have to pay in clear terms. Maybe it’ll save the consumers some hidden expenditures and surprise costs, but the increase in the fees of the credit card companies and decreased rewards are not doing much for relieving the financial burdens that owing a credit card bestows upon people. The government should look into these aspects too and modify the act or provide a remedy to the customers.