Credit Card Companies Squeeze in Changes Before Consumer Protection Law Takes Effect

A new credit card act that's supposed to protect the consumer might be having some unintended side effects.

Here's the deal. Starting in February 2010, credit card companies will become limited in how and when they can charge fees and make terms changes, thanks to the Credit CARD (Card Accountability Responsibility and Disclosure) Act. But does that mean credit issuers are turning over a new leaf and actually caring about the well-being of their customers? Heck no.

Before the new rules go into effect, they're trying to squeeze in some last-minute changes. Most noticeably, more and more folks are seeing their APRs go from fixed to variable, according to this article. Even if you signed up for a card with a fixed rate, companies only have to provide a 15-day notice - less than one billing cycle - to change your rate.

With the prime rate (which helps determine your APR) at a record low right now, you might not feel the pain right away. But keep in mind that rates have nowhere to go but up. That's one of the main motivations behind this new trend - banks want to make sure they can cash in when rates rise, regardless of the new law. Once your rate increases, the bank might decide to give you back a fixed rate - but by then, it won't much matter.

There's no question that new legislation is heading in the right direction. Anything that protects the consumer by limiting banks' sneaky tricks - which they currently hide in pages and pages of fine print - is a step forward. But let it lull you into a false sense of security. No matter what, creditors are always going to be after your money. That's why there's a better way out - one that doesn't require you to wait for Uncle Sam to save the day. It's simple: pay down your credit card balance.

The less debt you have, the less interest you'll have to pony up - and the less that rising rate will matter. If you're paying just the minimum on your cards, you're probably not paying off your balance any time soon. In fact, if the minimum doesn't cover interest, your debt is probably increasing.

Don't let credit card purchases you made months - or even years - ago jeopardize your quality of life today. If you want to free up the funds to comfortably pay your mortgage, buy life's necessities and even have a little left over to save, you've got to rescue yourself from debt. It might feel impossible, but it's not - help is available. Bankruptcy is one of the most manageable ways to free yourself from even the heaviest of debt burdens.

And it's absolutely free to find out if bankruptcy can help your situation when you sign up for a complimentary personal debt analysis with a DebtStoppers attorney in Chicago or Atlanta. Don't let credit card companies take you for a ride when you can get on the path to financial independence.

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