Protecting yourself in 2011 against credit cards

The credit card issuer always has ways and the means to work around a credit card, and they have a lot of time on hand to decide the next plan of action. However, this could be countered by some smart moves by the customers. The restrictions that were imposed by the Card Act 2009 have made life a bit difficult for credit card companies. There are a lot of loopholes, and credit card companies are making ample use of the same. Federal agencies are looking closely to see how credit card companies are currently functioning, and how they are likely to function in the coming year. What are the issuers likely to do in the coming year? How can cardholders protect themselves?

• Firstly, save tens and thousands of dollars by paying off balances before the end of the grace period. Always pay more than the amount that is the minimum due on the credit card. Large credit card companies seek customers who have paid more than what is required in spite of the hard times.
• Interest rates on credit cards have not really reduced the way they have on savings accounts. So it makes sense to just round off the payments in order to save money. The low interest credit cards are available for the prime sector, whereas for the rest the interest rates are still high. However, this hike in interest rates is not likely to last for long. Low rates are most likely to make a comeback as customers are always on the lookout for better bargains.
• One must keep updating oneself on the policies and other rate changes in the credit card. Each and every notification that is received must be read carefully and understood. Credit card companies will give a 45-day notice period before implementing the change, but an increase in the late fee charges or the APR will only be known if one is already aware of the charges one is paying. One must file all the credit card statements and keep them handy. Always read the fine print on the terms and conditions of the credit card.
• Business credit cards are not covered by the CARD Act, so it is better to apply for a personal credit card in the name of the business owned.
• Beware of the opt-in notices for protection in case of overdraft. These fees are charged when you go over limit.
• See if there are any loopholes in the agreement where the annual fees will be waived, and complain if there are fee hikes.

Doug Nicholas

Doug Nicholas, a financial consultant by profession with a Masters degree in International Business from Brown University, is also an ardent writer. Though he has a full time job at one of the companies listed on Wall Street, he does manage to squeeze in time to follow his passion. He puts his ideas to words in his articles related to finance and business.