Debt and Debt Relief

The Credit card accountability, responsibility and disclosure law goes into affect on August 20,2010 The laws are supposed to protect consumers from abusive practices by credit card companies. The questions is whether the law will have the impact anticipated. The law was put into affect in February 22,2010. The six-month lag for its enactment gave credit card companies sufficient time to modify fees and position themselves before it becomes effective. Therefore, the law may be of little value and more of a demonstration that the government is protecting the consumer that the actual affect it will have on their credit cards, fees they pay and ultimately the biggest problem of too much debt..

Here is a summary of the new laws key features

• Retroactive rate increases – Issuers must wait for the promotional period to expire in order to raise interest rates. . Cardholders cannot be punished for universal default, anytime or any reason clauses and for non-related accounts. When a cardholder shows that he has paid on time for the past 6 months, the issuer must restore the lower interest rate.
• Notice of Rate Hike – a 45-day notice period for key contract changes and rate hikes. This is not applicable to credit card limit changes.. The laws does not stipulate limit on interest rates. Your APR rate can still triple.
• Fee Restrictions – Issuers cannot charge cardholders an overlimit fee unless they approve the transaction and over limit amount..
• Restrict Credit Cards to under 21 – Those under 21 who can’t prove means of income must have a co-signor 21 or older to get approved.
• Double billing cycle – ends the practice of basing interest charges on the current or previous charges, or double-balance billing.
• Fairer payment allocation – int the current system payments are applied to lower interest balances than to the high one, the law reverses this procedure.
• More time to pay – The statement must be sent by the credit card company 21 days before payment is due, currently it’s 14.
• Gift Card protections – a 5 minimum expiration of gift cards is mandated.

It can be argued that some protection to the consumer is afforded by this law, at the same time it can be said it does not do enough. Furthermore, credit card companies have been hiking interest rates, imposing new fees and changing other terms favorable to them in anticipation of the law. As a result the impact of th law will not be as great as had been anticipated.

This law does not help those that cannot meet their monthly obligation or are having a difficult time with their debt. For them the only choice is debt settlement, which offer the only real hope to be debtfree.

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