On Tuesday the Senate voted to approve a bill that will make it tougher for credit card issueers to raise fees and interest rates starting early next year.  This action comes after years of abuse by credit card companies of their customers.  Chris Dodd said “To have the industry reaching and be as abusive to consumers, it needed to stop and it needed to change”.  The bill would make it more difficult for people under the age of 21 to get credit card.  It would also eliminate interest rate hikes unless a customer is more than 60 days late on their credit card bill.

No More Late Fees On Late Credit Card Payments

The new bill would prevent interest rate hikes on consumers who are late on their monthly credit card bills.  The new rules for consumer credit would allow a rate hike only after 30 days late.  As it is now, if you miss you payment by one minute, some credit card companies have the right to raise your interest rates to as much as 30%.  No wonder consumers are mad.  With the current economic crisis, many consumers are just throwing up their hands and walking away from their debt.  Hopefully this new law would have people be more willing to pay off their debt.  When asked about a debt bubble Timothy Geitner did not seem to be concerned about it.

President Obama recently met with executives from the major credit card companies.  The topic was lowering interest rates and the credit card fees that credit card companies are charging consumers.  The move initiated by President Obama was designed to have credit card companies voluntarily reduce fees and interest rates.  It’s crazy you are late on your credit card any the raise your credit card interest rates over 30%.  You may have been with your credit card company for years and only miss one time.  In my opinion these practices are predatory and abusive.  I can get that a company needs to make money but it should not be at the hardship on people in the community.

Most Credit Card Companies Have Received Bailout Money

In some sense this puts the government in a funny position.  They are actually profiting from what the banks and credit card companies are doing to be more profitable.  President Obama did make a pledge to the American People th reform the high rates and fees that credit card companies charge consumers.  In response the House Financial Services committee in a landslide approved a bill that would reduce a lot of the fees and limit the ability of the credit card companies to charge late, over the limit and penalty fees.

Do Not Use Your Credit Cards

Remember that credit card companies are not your friend.  Your best bet is to only spend what you can afford and pay your bill off in full each month.  Once your are in debt and making minimum payments, they credit card company has you.  You are a client for life and will never get the debt paid off.

How do I get rid of credit card debt fast?  Being in credit card debt can be a frustrating and scary experience.  The over the limit fees and the late fees can get burdensome if not pushing you over the financial edge.  If you have your back against the wall you do have a few options.

What Is The Quickest Way To Get Out Of Debt? Continue Reading »