Now that the credit card reform bill has passed through both houses of Congress, the bill is on its' way to the President's desk. The fees that credit card issuers rake in from consumers with below average credit, bills paid late, balances exceeding credit limit, or any of another dozen possible fees will be reduced or eliminated. Credit card issuers have stockholders and need to continue to generate revenue, so look out for new fees, increased fees, and reduced benefits. The credit card business is about to change forever.
While the recently-passed bill may address many issues that credit cardholders complain about, there are plenty of loopholes for credit card issuers to take advantage of to increase fees on people who regularly use them - even if those people pay off their card every month. In the meantime, expect your credit card interest rate to go up prior to the law going into effect.
Some possible loopholes that may increase your costs:
Whether you have a credit card from your local credit union or some big bank in another state, your terms will change with the passage of the new law. If you have any questions about new terms, once they are issued, call the number on your statement for any clarifications.
- Bringing back annual fees
- Reducing the bonus features of rewards programs
- Charging interest beginning with the date of purchase (no grace period)
So, what are you options?
No matter what loopholes credit card issuers exploit, the ones who suffer will likely be the consumers who continue to use their credit cards. While credit cards are an amazing convenience, the best way to avoid any fees from credit card issuers is to simply stop using credit cards.
- Shop around for a credit card that will continue to provide a grace period, allowing you to use your credit card and pay if off every month without interest charges.
- Start using your credit union's debit card more often instead of your credit card. Using your debit card for regular purchases may force you to pay closer attention to how much you spend, but that is not a bad thing!
- If/when new fees appear, call your credit card issuer and try with all your might to get them reversed. If consumers rebel against credit cards, the issuers will adjust to the new market conditions.
- Last, but not least - use cash. The low-tech solution just might turn out to be the most affordable.