Credit Card Debt Facts - How Will The CARD Act Change Your Financial Life?

In todays economic crisis, there are many credit card debt facts we could choose to focus on

. However, facts related to the Credit Card Accountability Responsibility and Disclosure Act (the CARD Act) seem to be of the utmost importance now since, next February 22nd, the law will go into full effect. Financial experts arent still quite sure how theCARD Actwill affect the lives of millions of consumers and the reality of the credit card industry. Only time will tell, with certainty, what the effects will be. Nonetheless, some results are expected, and this article will try to quickly outline them just so you have an idea of how your financial reality will probablychange. 1)Some Creditors Will Lose Millions Of Dollars In Revenue Banks such as Citi, Chase, and Bank of America that mainly depend on integral strategy and promotional offers to retain clients and attract new customers, will be deeply hurt by the new CARD Act. Why? Easy: the new law limits rate increases, promotional offers, and fees such as over-limit charges. Chase, for example, is expected to lose between $500 million and $750 million. On the other hand, banks that have used co-branding and relationship marketing strategies to attract and retain clients, such as Wells Fargo and U.S. Bank, wont be hurt too badly in this particular matter. 2) New Fees Will Be Implemented If the new law will represent a loss of more than $50 billion for the credit industry, they must find a way to make up for it. After all, banks arent charities, but rather businesses. And, Im sorry to have to be the bearer of bad news, but its likely that youll end up paying for more fees to make up for the money creditors will lose due to the new law. Financial experts have pointed out how some creditors have already added an annual fee to their credit cards, and more creditors will likely do the same. Other fees such as extra costs for balance transfers, inactivity fees, and annual fees if your card isnt charge for a minimum amount a year, are other examples of ways creditors have found to squeeze a little bit more money out of you. So brace yourself! It could get rough. 3) Access To Credit Will Decrease The CARD Act will cost creditors millions of dollars, so theyll have less money to work with. As a direct result, financial experts expect fewer consumers to have access to credit. This could be considered an advantage or a drawback. For instance, it could prevent you from borrowing more than you can afford. Nevertheless, if theres an emergency, you may not be able to rely on a credit card to get by. Then, again, maybe thats a way to avoidaccumulating debt. Once again, only time will tell if the new CARD Act will do more good than harm or the other way around. 4) Rewards Programs Will Be Watered-down Sorry to say this, but your beloved rewards program, the main reason why you picked to use that particular credit card, may go through some changes in order to save the credit industry some money. As I explained earlier, banks are looking for all kinds of alternatives to cut corners, and rewards programs are no exception to the rule. A word of advice: verify that your program will remain appealing to you despite any changes it might be subject to. 5) Unfair Practices Will Decrease Finally a significant good piece of news! Thanks to the CARD Act, creditors will be required to bill clients with at least 30 days in advance before a bill is due. This will help you avoid any late fees, which, in the past, have represented $22.9 billion in revenue for credit card companies. In addition, youll have a better idea of how much in debt you are. According to the new law, credit card companies will need to disclose financial details in each statement, such as how long itll take you to pay off your debt by making the minimal payment each month. This way youll have a better understanding of where you stand and if you should look into a debt option to pay off your bills ASAP. Use Your Credit Card Only For Emergencies After going over these few credit card debt facts, restricting the use of your credit card for emergencies seems to be the best way to manage your credit card debt. I also advise you to use a card with a fixed APR to save you more money and any future headaches. Whether you agree with the new CARD Act or not, unfortunately theres not much you can do about it. Nevertheless, youre, in most cases, in control of your life. This means you can choose to look into your finances and do something to improve them. If using your credit card only for emergencies and with a fixed APR is a piece of advice you can consider following, do it. If youre already too much deeply in debt and managing your credit card seems to be impossible, dont despair. Theres almost always something we can do to put our finances back on track. Examine your finances in detail and research different alternatives to pay off your debt. It might be easier than you think. After all, youre not alone. Millions of consumers are in the same boat, and due to this harsh reality, more financial alternatives have been made available to consumers in financial straits. Contact a reliable debt settlement company to explore your options to cancel your debt. Your credit card debt solution might just be a phone call away.

Credit Card Debt Facts - How Will The CARD Act Change Your Financial Life?

By: John M. Stevens

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