The credit card providers in America have been callously ripping off noiseless consumers since decades. Uncontrolled (or rather unnoticed) by the controlling authority, these providers are making life miserable for most of the population that is completely depended on plastic money by materializing with various money-sucking strategies with no ramification at all. This woeful serious of events has obliged the mass to protest against sudden raise in charges, inexplicable fees, raise in interest rates, and other cash making ways.
However, it seems that the reign of credit card plunders will last just for a few more weeks. Clauses for consumer safety is noticeably mentioned in the Credit Card Accountability and Disclosure Act drafted in 2009, but will be effective from February 2010. A savior for masses, this act has shook the credit card companies and they are now trying to acquire total benefit from customers before the act is effective.
Unexpected Rise in Interest Rates
The effort of federal government to drop the interest rates doesn’t seem to be affecting the policies of credit card companies. Research says the interest rate on credit card has jumped over 20% in the first half of 2009 while the rate is dropping in other credit programs. There are about thousands of cases of customers who noticed doubling their interest rates, even though the payment has been made on time. Thanks to the new policy, consumers would be now informed 45 days prior to any such change in the interest rates. However, it is expected that card users will be more prone to such events till February as it appears to be a golden period for the card providers.
Unavoidable Overdraft Fees
Another major issue faced by customers, overdraft fees, will be now optional for every credit card user. According to the new policy, users have to ‘choose’ if they want an overdraft facility, which was previously by default. Those who do not want to opt for such charges wouldn’t be able to spend more than their credit limit. For customers, it can be a minor change. However, you will be surprised to learn that a considerable amount of their yearly profit is generated from such fees. In the first quarter of 2009, BOA generated over $700 million just from overdraft fees. How can they simply let this source of income slip from their hands? Be prepared to notice unexpected overdraft fees every month till February, as the heat is already seen smoldering the customers.
You didn’t miss your payment? Recheck the due date
The most common concern affirmed by credit card users is an unexpected alteration of due dates. A research blog reveals that quite a few banks are consciously involved in developing a system that occasionally generates an earlier due date that causes the regular bill payers to miss the date who are then charged with late fees, which is also sometimes hiked without any explanation. Due to these late payments they are further victimized of permanent rise in interest rates. Seems a brutal plan to entrap customers? Here is another policy that will save credit card users from the nasty assault of credit providers. Under the clauses of this new act, credit card companies are required to dispatch the bill to the customer’s billing address at least 21 days prior to the due date.
Credit Limits Lowered Without Prior Notice
Credit score not only about timely payments. One of the major components that can severely affect one’s credit history is the ratio of credit availability. This ratio is calculated on the amount a customer owes against the residual amount he/she can utilize. The more you spend lowering your residual credit the low is your ratio. Unfortunately, this ratio is not controlled by you because the credit providers seems to be bothering people with high credit score by lowering their credit limits radically and unexpectedly, thus lowering the ratio. And this trend is observed mounting every quarter. But what monetary benefit will the banks derive from ruining somebody credit scores? If we rely on the recent survey to develop a conclusion, banks are likely to raise the interest rates of the customers who maintain a low credit score. In response, the new policy will compel the banks to inform the customers well in advance about the change in credit limits and with convincing reasons. Phew!
What is Universal Default?
A shocking technical error, or a deliberate practice, by card providers known as universal default is what offends most of the effected customers. What is Universal Default anyway? A customer misses a payment on ‘X’ card for which he is charged or rate of interested is hiked on ‘Y’ card, along with obvious charges on ‘X’ card. Hypothetically, both cards are completely unrelated and no reason can affect the functioning of each other. However, this simple hypothesis doesn’t seem to be absorbed gracefully by the banks. During vacations, the charges’ arising out of so called ‘Universal Default’ rises significantly. This too is being banned by the new policy which will be effective in February 2009. Till then, try not to miss payments on any card.
In this era of high-tech revolution and customer satisfaction, the part of population utilizing credit card facilities are still under the clutches of cruelty demonstrated by the credit card companies. Fortunately, the federal system has drafted a graph to eradicate the plunders of these companies. However, the period between today and February 2010 is more precarious than ever. Credit providers are trying hard to suck up every penny they can from the users by further hiking the interest rates, charging late and overdraft costs, and curbing the already-low credit limits.
