Credit Card Companies Fight To Stay One Step Ahead of Consumers

On Feb. 22, 2010, the Credit Card Accountability, Responsibility, and Disclosure Act of 2009 slapped regulations on the credit card industry that, since its inception, placed dubious practices onto consumers. The Act limits many of the more disreputable practices that card companies had become known for, such as arbitrarily raising interest rates without notice and charging large fees for exceeding a credit limit. Yet, even before the regulations came into effect, creditors found ways to trip up consumers while still falling within the new guidelines. After all, the CARD Act ensured much of their revenue would be lost, so companies had to think up new ways to earn money besides their typical interest rates. Now consumers have a whole new set of traps to look out for if they want to keep using their credit cards.

One of the main money-making schemes that card companies have recently enacted is via surcharges and charging higher fees. Last May, Discover began tacking a 2 percent surcharges on all purchases outside the United States. Rolling over a balance once charged a 3 percent fee, but now, issuers like JPMorgan Chase charge customers a 5 percent fee for such a service. In addition, with no limit to the types of fees that issuers can enable, it has caused companies to simply increase fees or enact them for cards that previously had none.

As a consumer, it is important to go back and read the fine print for your credit cards. The Terms and Conditions statement for your credit card is more important to read than ever before. Even on cards that you rarely use, fees may be added which make the cards much less attractive to have in the long run. Fortunately, new laws require card makers to give ample time and notification of changes, but it is important to not ignore mail from your credit card companies. The letter you pitch in the trash could be a notification of fees that run more than $100 a year.

The new laws have also tightened the credit markets, making it more difficult for consumers to obtain credit. Between March and September 2009, the amount of credit available to consumers dropped by $252 billion, or 7 percent. Under the CARD Act, the availability of credit could tighten further. However for some people, whether they know it or not, this is good news. With the average American household carrying $10,700 in credit card debt, it could be good for the financial health of our country if this privilege is limited.

Many people who have gotten into financial trouble at the hand of credit card companies and have turned to debt settlement programs that help them navigate these deep, difficult waters. A debt settlement company settles your debt with a credit card company for less than the amount that you owe. Greenshield Financial Services is a Financial Health Management Company that specializes in a debt settlement program as alternatives to debt relief, debt help, and bankruptcy to help you learn how to get out of debt.