So have you noticed that your credit card statements have changed
recently?
If not…you are looking very hard!
When you are renting to own your home, your goal is to build solid
credit and that requires lines of credit.
The new Credit Card Reform of 2010 has taken effect. It was created to
protect you the consumer. The goal is to make you aware of what your
credit card terms are and how you can best use credit so that you are
not paying an arm and a leg in fees!
- You will now get 45 days notice prior to any changes to your credit
cards. They must give you 45 days notice prior to any changes.
- Your statements are now coming earlier. The credit card company now
must have statements mailed to you at least 21 days prior to their due
date. This is to give you more time between getting your statement and
its due date. Always remember to pay your credit cards on or before
their due date. That means the credit card company need to process your
payment (receive it on a business day) on the due date or before. Don’t
mail your payment in on the due date…it will be late and if doing bill
pay be aware of how many days it takes to get to the credit card
processor.
- When we open a new account your interest rate will stay the same for
at least 12 months. Then if your rate is increased, the increase will
only be on new purchases. Therefore if you still have an outstanding
balance that balance will be at the original interest rate until paid
off and new purchases will have the new rate.
There are some exceptions to the above 12 month no interest rate change.
So you need to look at your terms. For instance if you have 60 day late
delinquency, your rate may go up.
- If you are less than 21 years of age it will no longer be easy to open
a credit card account. You will need a co-signer or show proof of
income.
- There will now be an “Opt- Out” if you do not agree to the terms that
your credit card company offers you, then you can close your card but
have multiple ways of paying off the balance- including up to 5 years to
pay off a card that has been turned off. This would allow you to pay the
card off under the previous terms and no longer use the card.
- Other accounts can no longer prompt the credit card companies to raise
your interest rate. It used to be that credit card companies would
increase your interest rate if you have late payments or defaults on
other bills such as utility bills.
- This is a pretty big plus….The credit card Company must restore your
APR if you make 6 consecutive payments after a 60 day late payment. So,
if you are 60 days late your interest rate is increased as a penalty
making your payments higher. But, once you pay 6 times in a row on time
they must lower back down to the APR that you had prior to the late
payment. This saves you a lot of money if you have an outstanding
balance you are trying to pay down.
- If you have higher interest rates – for instance cash advances or
transfer balances will have a higher interest rate than new purchases.
Those higher rate balances will be paid off first. So, if you pay more
than your minimum payment the extra will go towards the principal of the
balance with the higher interest rate.
- Harder for folks with bad credit to get credit. The Fed agreed that
these rules may make it more difficult for folks with bad or limited
credit history to qualify for a new credit card. In this case getting a
secured credit card may be an option. Often you can go to your financial
institution and request a secured credit card where they give you a
credit card secured by your funds. Therefore your credit limit is
limited by the funds you have in the secured account and you can’t
usually withdraw from the account, only charge against what is there.
- Gift card credit cards can’t expire for at least 5 years and there are
no inactivity fees unless unused for 12 months.
Lori Jakee
Swiftcurrent Investment Group, LLC
www.EZQualDreamHomes.com
