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Despite a credit card reform bill that is meant to help consumers, credit card companies are still taking advantage of them in many ways. In fact, some believe that things are worse now than ever before. Is this really possible? Well, take a close look at the issues below to formulate your own opinion.
1. Increased rates. More so today than ever before, interest rates are out of control. This can hold true no matter if you have a 550 credit score or one above 800. Consumers are finding their rate going through the roof. In fact, some have received notice that their rate will reach 35 percent or more. What would that do to your monthly payment?
2. Minimum payments on the rise. There used to be a time when most credit card companies would only require a minimum payment of one to two percent of the overall balance. For some, those days are long gone. Now, some consumers are facing a minimum of five percent.
Two percent on a $10k balance is $200. Five percent on the same amount is $500. Would you be able to swing this increased minimum payment? For many, the answer is no.
3. New fees. Annual fees are still in effect, but there are many others that are joining the game. Some credit card companies are charging an inactivity fee. This is nothing more than a fee that is charged if you don’t use your credit card for an extended period of time. Other companies, such as Citibank, are hitting consumers with fees for not charging at least $2,400 (or more) per year.
4. Bye-bye to rewards. For many, the only good that comes from using a credit card are the rewards they receive. It is a shame, but many credit card companies are cutting back in this area. For instance, instead of giving three percent cash back on qualified purchases this was cut back to one percent.
5. Limits being cut. Do you rely on a high credit limit to get by? If so, you could be in trouble. Credit card companies are slashing limits by up to 75 percent, while also canceling accounts that are not beneficial to them.
What can you do?
It is important to know the current terms of your credit card, as well as any changes that your company makes. Remember, you will receive a notice in the mail if the terms and conditions of your account are changing – don’t take this lightly.