Follow on Google News News By Tag Industry News News By Place Country(s) Industry News
Follow on Google News | 4 Shocking Things Credit Card Companies Can (Still) DoCredit card companies continue interest rate hikes depiste new reform signed by President Obama.
By: Susan McMahon 1. Rate Hikes Interest rates are out of this world… They've increased steadily over the past 5 years, and in general are higher than they've ever been – some creditors are charging up to 36% APR. No current laws cap credit card interest rates, so technically the sky's the limit. But the CARD act will help curb abusive practices. As of February 2010, issuers won't be able to arbitrarily raise rates on existing balances. But cardholders will still be subject to interest increases for late payments and various other infractions. And card companies will be able to raise their rates as high as they want, whenever they want, on future purchases even after the reform bill kicks in completely. 2. New Fees Fees aren't just rising -- they're multiplying. Cardholders are getting hit with fees they've never seen before. In reality, customers are seeing new annual fees, inactivity charges and more. None of these charges are unheard of, but many fees that were unusual are becoming commonplace. For instance, some Bank of America customers were shocked to learn that their no-fee credit cards would be subject to a new annual fee that ranges from $29-$99. Fifth Third Bank recently introduced a $19 inactivity fee for customers who don't charge anything for 12 months, and Citibank is hitting some consumers with a fee if they put less than $2,400 on their card annually. 3. Higher Minimum Monthly Payments Banks are also requiring bigger and bigger minimum payments. Chase has increased the minimum payment for some consumers to 5% of the monthly balance from 2%. For someone who carries a $5,000 balance, that means the monthly payment of $100 skyrockets to $250 -- a whopping 150% increase. Wyatt Johnson, President of Key Debt Services said, "This is making payments virtually impossible for some consumers," he said. "It's throwing people off when they were living on a tight budget anyway." 4. Slashed Credit Limits and Canceled Accounts Without so much as a call from the bank, some customers are learning their credit limits have been slashed by as much as 75%, or that their accounts have been closed altogether. Even cardholders who don't charge anything might find their accounts abruptly closed. With credit losses at a record high, companies see inactive cards as a red flag and close the accounts to avoid the worry of future writedowns. Usually cardholders have this credit line available for an emergency, for this kind of current economic situation, but now they're turning to it when they need it, and it's gone. What's a Consumer to Do? “If you find yourself in the situation where you are unable to make your payments due to a financial hardship, in addition to these rate hikes, fee and minimum payment increases, you may want to consider debt settlement as an alternative to bankruptcy.” About Key Debt Services Key Debt Services was founded with one goal in mind -- to help our clients become debt free. Our proven system provides a long-term solution -- in the shortest amount of time without filing bankruptcy -- to help our clients get out of debt and stay out of debt. Our experienced team of experts help our clients achieve their goal of eliminating debt and regaining financial independence. We have a proven track record and are here to assist our clients reach financial freedom. Key Debt Services is an Accredited Member of TASC, The Association of Settlement Companies, and their negotiators are certified by the IAPDA. Key Debt Services 1425 Greenway Drive Suite 570 Irving, TX 75038 866-216-3328 For more information contact Wyatt Johnson at wyatt@keydebt.com # # # Our experienced team of experts help our clients achieve their goal of eliminating debt and regaining financial independence. We have a proven track record and are here to assist our clients reach financial freedom. End
Account Email Address Disclaimer Report Abuse
|
|