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Poll

Credit Card Traps

 

Think that paying your bill on time is enough?  Think again.

Paying your monthly minimum may not be enough to keep you out of trouble these days.  Reports show that some credit card companies are as much doubling interest rates of cardholders, which in turn raises your monthly minimum payments.  You may think that it’s then as easy as calling the company to resolve the issue, but places like Bank of America are legally allowed to increase rates.  Bank of America responded by stating "We do periodically review the credit risk for each account and may re-price individual accounts based on that risk assessment. That review takes into account a customer's performance with us as well as external credit risk indicators."

Credit cards have become a central issue (and sometimes the only means of survival) for many Americans.  Americans on average have $8,000 in debt and own seven or eight credit cards. The total amount of consumer debt is close to $1 trillion.  Credit cards were meant for emergencies, but more Americans have started using them for day-to-day expenses. 

Help could be on the way.  The Federal Reserve proposed changes to credit card rules this past spring and received more than 62,000 comments on its Web site from the public -- the most ever on any issue.  The Federal Reserve could approve changes that would help people who find better rates at other companies leave their current card company.  Other changes could include requiring companies to allow sufficient time to make payments, and reducing or eliminating some fees.  For now, the House has passed a bill with a credit card holders' bill of rights, but the Senate has not.

The banks say self-regulation has already eliminated some credit card practices that were considered abusive, but increased regulation could lead to further reductions in the availability of credit, but consumer advocates want even more protection.  Bottom line is to use cards sparingly if you can, and pay them off so you are free from extra hidden and changing fees.

Source: www.abcnews.com