The bill shows up a week before it's due. Your balance just keeps growing, because all of your payments are being applied to the old, low-interest balance you transferred from another credit card. You scramble to pay this bill on time, but your check doesn't get there until 5:00 p.m. on the due date, and payments are only accepted until 4:00 p.m. Boom -- a $40 late fee. The next month, you receive a notice that your rates are going up. The reason? You guessed it: because you were late last month!
Credit card companies have been using these kinds of tactics for years to maximize their profits. If you're one of the millions struggling to manage debts you can't afford, chances are, these practices have been a significant factor in keeping you locked into debt. And the credit card industry has been able to get away with it, in large part because of historically lax regulations.
But all this could soon be changing. Federal bank regulators recently issued regulations designed to target these troublesome practices. And, a subcommittee of the House has introduced a bill to codify the regulations. The proposed consumer protection act is entitled "The Credit Card Holders' Bill of Rights.- If the bill gets through the full House and the Senate, it will make sweeping changes to the industry.
Under the proposed regulations, credit card companies would be prevented from hiking your interest rates at the drop of a hat. They would also be required to give 45 days notice before any proposed increase in your rate -“ and you would be able to opt-out of the increase.
You would also have the opportunity to set a maximum limit for your credit line. This would stop those sneaky over-the-limit fees that can catch you by surprise when you accidentally go over your credit limit by a few dollars.
Perhaps most importantly, credit card companies could no longer hit you with rate increases, fees, or other penalties based on your payment history with other creditors. They could only consider your individual payment history with them .
The regulations would also make it a lot easier to avoid those traps the credit card companies have set up to catch you in a late payment. They must consider a payment to be timely so long as it is received by 5:00 pm. EST on the due date. And, you're entitled to get your bill at least 25 days before it's due, giving you more time send payment.
The proposed law is certainly a step in the right direction. But keep in mind, if you're already drowning in credit debt, help is available right now. Federal bankruptcy law is designed to help people free themselves from unmanageable credit card debt. Call a bankruptcy attorney today and learn how bankruptcy can help you break free from the control of the credit card companies.