More Credit Card Issuers Are Switching to Variable Rates In Anticipation of New Law

There's a new law to protect consumers on the horizon - and credit card companies aren't exactly taking it sitting down.

In anticipation of next year's Credit Card Accountability Responsibility and Disclosure Act - which aims to end hidden fees and unfair term changes - credit card issuers are looking for last-minute ways to squeeze money out of consumers before their clock runs out. How are they doing it? Well, one method is by switching your card from a fixed rate to a variable rate, according to a recent story.

It might not seem like such a big deal now, since the prime rate (what creditors use as a base to set variable-rate APRs) is about as low as it can get. But that means that it's only going to increase - and that's exactly what credit card companies want to be able to take advantage of. Hey, they might even give you back your fixed rate - once it settles at a much higher rate, of course.

Don't get me wrong, the new consumer protection law will still be helpful. Hopefully it will increase transparency - something that creditors have long avoided, with their surprise term changes and hidden fees (while they're not technically "hidden" they are usually located in agreement documents the size of encyclopedias - who can actually read all of that?). But I can tell you what the new legislation won't do. It won't change credit card companies' bottom line.

Creditors are in the business to make a profit - and they do that by charging interest and fees. The government might be able to help, but if you want to free yourself from credit card debt for good, you're going to have to take matters into your own hands.

Remember, the smaller your balance, the less interest you'll have to pay. When you make just the minimum payment on your bill, you probably aren't even covering interest - meaning you are increasing, not lowering, your debt. But start paying off more than your interest - heck, pay off your entire balance - and you could save thousands of dollars over the next few years.

Imagine - no more living paycheck to paycheck, no more worrying about how you can afford the mortgage, no more dealing with debt. It sounds like a dream, but it doesn't have to be. Bankruptcy - one of the most practical ways to pay down your debt burden - is your right as a U.S. citizen. To find out how bankruptcy can make financial independence a reality, just fill out our free personal debt analysis form online for a consultation with a Chicago or Atlanta bankruptcy attorney - at no obligation. Isn't it time you stopped putting your money into the hands of creditors and started keeping it where it belongs - in your own pockets?

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