How To Protect Yourself Under The New CARD Act
The new credit card bill that takes effect in February will have huge ramifications for both issuers and cardholders. Restrictions on rate increases, fees and increased disclosure requirements will bring about many changes for issuers. Borrowers should learn about the crucial stipulations in the law and the loopholes.
Even though the new rules will confine retroactive rate increases, the CARD act will not stop all negative changes to card accounts. Even consumers with high credit scores may be affected by unwanted adjustments.
For a consumer to maintain an adequate credit score and keep account provisions intact in the best way is to be on the defense. This includes paying on time, not closing accounts unless its necessary and keeping balances as low as possible.
Decreasing your outstanding balance will protect you against bad changes to your account, improve your credit score, and most importantly saves you money. This is because a lower balance may help protect your credit score against credit limit reductions. If your credit limits decrease, and your debt doesn’t decrease, your credit score may drop. According to the CARD Act, issuers have to give you the option to opt out of a considerably large change in terms.
In these situations, issuers must send out a notice 45 days in advance at the least from the date the changes will take effect. The purpose of this is to give you time to decide if you want to reject the proposed change.
It is crucial that you check your credit score, which is based on your credit report. Errors such as collection accounts or delinquencies will lower your score. This is why it is key to check on your credit reports at the three major credit reporting agencies on a regular basis. You can do this for free.
Any large change in law that could affect your finances is a big deal. Consumers should educate themselves as much as possible in order to protect their credit report and financial situation.
Mallory Megan works for a debt collection agency. Also, she composes articles about the credit industry, business, finance, and debt collection. Click here to get your own unique version of this article with free reprint rights.
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