Consumers would be expecting a lot of changes in their credit cards' terms and conditions even before the new credit card law completely takes effect in February 2010. Because the rules stated in the new law could jeopardize most credit card issuers' profitability, they have started to act against them before they get implemented.
Credit card holders are already experiencing lowered credit line that could even go below their outstanding balances. Such creates tension among consumers who are anticipating over-limit fees when they are not able to keep the balances below the new credit limit.
While this is true among many credit card providers, there are those who are well into implementing arbitrary interest rate hikes. Such comes off as a double-edged sword for consumers because they need to be extra careful in keeping their balances down, while having to cope with the minimum increases each time. Those who barely make the minimum are sure to suffer.
The on-going hikes on rates are also felt even by those who have contracts with their providers stating that they pay a locked rate until the balance is paid. Their minimum payments too could rise. As an example, a consumer shares that he used to pay 2% interest. At this figure, he was able to feel proud at himself for paying off the minimum ($600) or even more. But now, his credit card provider has jacked up his rate to 5% which equals to $1200. He says that he has difficulties coming up with the minimum payment each month.
Most credit card advisors say that credit card holders should try contacting their issuers for a negotiation. Consumers have followed; however, there is no certainty in getting the just rate. Questions on the success of such attempt revolve around how consumers are supposed to sound to their issuers and whether past payment history matters.
One of the new provisions of the new credit card law which has already taken effect gives the consumers the right to opt out on interest rates. Many credit card providers will allow their clients to opt-out on hikes; however, that means continuing payments in the old rate and closing the account. This could be troublesome if the issuer reports the available credit is the amount due as the credit score stagnates until the last payment is made and the account is closed.
Still, some experts advise that if consumers are facing interest rate increases which are up to 2 and half times the original rate which they can not negotiate against, the best thing to do when funds are running short is to look for another source of funding. Consumers should other means to have the money to pay the off the account.
It would take a while before the economy jumps back to normalcy again. Credit card debt is just one of the things most Americans have to keep an eye on. In fact, the unemployment rate plummets, which makes it more difficult for the credit holder. It is advised that consumers should do their best to pay of their current dues as soon as they can before the amount doubles.
Apart from that, the public should consider re-working their budgets to avoid short-term credits.