10 Months of Grace, but Not for You by Mary Hunt on Creators.com

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10 Months of Grace, but Not for You

Millions of Americans breathed sighs of relief in May as President Barack Obama signed the Credit Card Accountability, Responsibility and Disclosure Act of 2009. Even though the law will not go into effect until February 2010, it promises to be a turning point for American consumers and an end to the days of unfair rate hikes and hidden fees.

The problem is the 10-month heads-up period that the law granted to banks and credit card companies. A rational person might assume that issuing banks would begin immediately to comply with the law, but it appears that just the opposite is happening.

Readers are reporting in droves that their interest rates are being increased without limitations. Credit limits on credit card accounts and home equity lines of credit are being slashed; accounts with little or no activity are being closed; and minimum monthly payments are being increased, all without rhyme or reason.

There is no doubt in my mind that credit card issuers are frantic about the provisions of the CARD Act and how it will limit their ability to do business. They're getting their licks in now, while they can.

What can you do to protect yourself right now, while the law can't help you out? Let me count the ways:

1. Get angry. If you are carrying a credit card balance, now's the time to become personally outraged by its existence and the ease by which you were able to get yourself into such a terrible situation. The interest rate you are paying is so outrageous that it's tantamount to highway robbery.

It's not your money. Stop seeing your available credit as your money. It's not your money! Do not add another single purchase to that account. Confirm your pledge by cutting that card into a dozen pieces. Do not, however, close the account.

3. Pay it off. You have to see this as a matter so serious that your very life is in peril. Sell assets to raise the cash. Do whatever you must to earn the money you need to pay off your debts, even if that means menial labor at night and on weekends.

4. Scale back your expectations. You may believe that this new law is going to make your life grand and your credit card issuer miserable. Don't believe it. Already, the credit card companies are showing us their true colors. They do not care about us. It's only their bottom lines that matter, and they will care for those bottom lines at the expense of customers. They'll find a way.

The only good credit card account is the one that remains active and returns to $0 every single month. Gone are the days when you could afford to have a revolving balance. Gone are the days when you could expect a card issuer to act reasonably. The sooner you learn that truth the sooner you'll find yourself on a level playing field with a reasonable chance to win at the credit card game!

Mary Hunt is the founder of www.DebtProofLiving.com and author of 18 books, including her latest, "Can I Pay My Credit Card Bill With a Credit Card?" You can e-mail her at mary@everydaycheapskate.com, or write to Everyday Cheapskate, P.O. Box 2135, Paramount, CA 90723. To find out more about Mary Hunt and read her past columns, please visit the Creators Syndicate Web page at www.creators.com.

Comments

1 Comments | Post Comment

You are a little harsh on credit card companies. After all, they offer convenience and credit and expect to make a profit. I think that the profit is way over the top, but it is our choice to use the service. If they had to scramble for customers, they might be more reasonable.

I do have an interest in this new law covering the behavior of the credit card companies. I pay off my Discover card balance each month, yet, I got what was a very nastily phrased letter telling me my annual interest rate was going up and I could take it or drop the card. If I hadn't been reading about the companies' scramble to raise rates and to do it in this way, I would have been stunned and furious. I was only hurt that they didn't think to rephrase what they had to say. You know: We appreciate your business but need to raise our annual rate. In order to give you time to make a decision, this will take place in two months. During that time, you have the right to cancel your card with no penalty as long as you pay off the entire balance. Not: take it or leave it.

I'll keep the card for its convenience but I'm much more likely to look elsewhere when a good offer comes along.

Comment: #1
Posted by: BB
Tue Sep 1, 2009 7:49 AM

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