Remember that credit card bill? It's effects are here.

[TRIGRHAPPY]

Credit card rates rise to beat new law | Shannon Buggs | Chron.com - Houston Chronicle

Long story short.......rates are going up and now you won't have the option to decline higher interest rates if they rise through no fault of your own. Just in time for the holidays.

Yea congress, this should increase spending and produce more jobs.

Surprise surprise, congress wanted to "help" the little guys who were having trouble making their credit card payments and now their interest rates are going up and they won't have the option to opt out of higher rates on preexisting debt. This is exactly the opposite of what the bill was supposed to do. Like someone else said, if you think our government has problems, just wait until you see their solutions! I'm pretty sure everyone would agree we were better off without this legislation (with the exception of the amendment added to this bill that lets us carry in national parks).

If ever there was a holiday season not to run up your credit cards, this is the one.
I know I say that every year, but this time more than good financial sense prompts this evergreen bit of advice.
Credit card reform hits hard in the new year, and card issuers are getting ahead of the new restrictions on their business practices by boosting interest rates now.
The average rate offered to a consumer with a solid 700 credit score is now 11.51 percent on a variable rate card, up from 10.66 percent in March, according to Bankrate.com. And a report released last week found that 100 percent of credit cards offered online by the largest 12 bank issuers in the United States continue to include practices that will be illegal when the Credit Card Accountability, Responsibility and Disclosure Act, passed in May, takes full effect next year.
The study reviewed those dozen banks because they control more than 90 percent of outstanding credit card debt nationwide, as well as the cards offered by the country's biggest credit unions.
“Since passage of the Credit CARD Act, we found that credit card issuers have done little to remove practices deemed unfair or deceptive by the Federal Reserve,” said Shelley Hearne, managing director of the Pew Health Group, which conducted the study. “In fact, some of the most harmful practices have actually grown more widespread.”
The most egregious are the upping of interest rates for reasons other than a cardholder being late 60 days or more on making a payment. Starting in February, issuers won't be able to do that on fixed rate cards.
To counter that restriction, issuers are converting many fixed rate cards to variable rate ones, Bankrate.com analyst Greg McBride said.
“The loophole in the law is that on a variable rate card, if the underlying index, which is often the prime rate, were to increase, then that higher rate is applicable to the existing balance,” he said.
It's likely that in your last statement or in a separate letter, you received notice saying your interest rate will rise on Dec. 1. If you didn't open the envelope, you may not know that a portion of the new law already in effect gives you the choice to opt out of the rate increase.
When you tell the issuer that you do not agree to pay higher interest, the issuer will allow you to pay off the balance at the rate where it is now. But there's a catch.
You will not be able to use that card anymore to make purchases or get cash advances . All you can do is pay it off. But don't wait to shop for a new card until that one is closed. You may find interest considerably higher and your credit score significantly lower.
McBride explained: “Your debt relative to your available credit is your utilization rate. When you close an account, the debt you still have becomes a higher percentage of your available credit. You don't want that utilization rate to be higher if you plan to get a car loan or a new mortgage, or to refinance your mortgage.”
This is a tricky time to use your credit cards, so here are more tips on what you can do to protect yourself:
• • Use cash to buy your holiday gifts to avoid adding to your credit card debt load.
• • Apply for a new bank card with lower interest rates. Chris Fichera, associate editor of Consumer Reports magazine, noted that the American Express Blue Cash reward card has an introductory offer of zero percent for 12 months and annual percentage rate between 11 percent and 17 percent.
• • Join a credit union and apply for its credit card. Fichera said you can join the Pentagon Federal Credit Union by paying a one-time fee to join the National Military Family Association, regardless of whether you or anyone in your family is in the military.
Then you can get the PenFed Visa Platinum card that gives 5 percent cash back on gasoline, 2 percent back on groceries and 1.25 percent back on everything else.

[Uriel999]

credit union ftw.

[TRIGRHAPPY]

Originally Posted by Uriel999

credit union ftw.

Doesn't matter, it's not a banking regulation, it's a credit regulation. I have a Citibank card and a credit union card.......both through visa.

[ForTehNguyen]

never carrying a balance every month on my CCs FTW

[TRIGRHAPPY]

Originally Posted by ForTehNguyen

never carrying a balance every month on my CCs FTW

Don't worry, they're coming for you too. I can't find the article now, but I've done the same thing for quite some time and it will soon be coming to an end. Increased annual fees, decreased perks, penalty "fees" for people with great credit, and point of sale interest on purchases.

[john_bud]

Solution #1 - pay with cash

Solution #2 - pay with check

Solution #3 - don't buy it until you can use solution #1 or #2.

jb

[KEVWYO]

Originally Posted by TRIGRHAPPY

Surprise surprise, congress wanted to "help" the little guys who were having trouble making their credit card payments and now their interest rates are going up and they won't have the option to opt out of higher rates on preexisting debt. This is exactly the opposite of what the bill was supposed to do.

The law hasn't gone into effect yet and the CC companies are trying to make up ground they are about to lose. Can't blame this on the gov or the law. The blame squarely goes on the CC SOB's.

[Frenchy]

Answer...Debit Card. Don't spend more than you have.

[KEVWYO]

Originally Posted by Frenchy

Answer...Debit Card. Don't spend more than you have.

Yep.

[AZXD]

Originally Posted by Frenchy

Answer...Debit Card. Don't spend more than you have.

Yea, and they are nailing people harder for over-draft charges instead of shutting the card down.
They let you buy a pack of gum, and tack on a $30 charge for insufficient funds.

They don't contact you, and by the time you figure it out ... You can have many of these charges racked up.

Cash is the only safe way to operate these days.