According to an article in the Dallas Morning News, the majority of the new credit card legislation passed by Congress will take effect February 2010; but many credit card companies are finding loopholes in the law and changing credit card rules now to recoup potentially lost profits.
The new credit card legislation will prohibit certain practices related to interest and fees; but many credit card companies are attempting to recoup those lost fees and interest payments in other ways. That's why cardholders need to watch out for unsuspected changes in the terms and conditions of their credit card in the coming months.
One of the things that credit card companies are doing is raising the fees for balance transfers, cash advances, late payments and even creating minimum APR's and annual credit card fees.
The article said:
"Arnold said InfiBank, his credit card company, notified him that it was setting a minimum rate of 15.99 percent for his annual percentage rate (APR). "This is a classic example of a loophole," he said. "The Fed could cut rates all day long, but if your account has a floor on it, you'll never get any benefit of it. There's no verbiage in this law that talks about rate floors.""
These additional fees and interest rate minimums can become particularly costly for credit card consumers, especially if they hold a balance or use the fee-based services of their credit card on a regular basis. It's quite certain that a significant number of credit card consumers will be negatively affected by possible fee and interest rate increases, because most people have become heavily dependent on using credit cards for their daily expenses.
In the coming months, all credit card consumers should take care to scan their disclosures enclosed with their bill to make sure that costly fees and other charges haven't been added to the account terms and conditions. If a credit card consumer does discover significant changes to their account, they may want to consider negotiating with the credit card company (although this may be impossible for certain changes) or even shop around for other credit cards with cheaper fees and charges.