In early July 2010, the new credit card rules come into force for the protection of consumers against arbitrary increases in interest rates and other unfair practices. It must, however, whether these new rules are really help. Why this doubt is there? For the same reason that prices in most of the cards to increase today, as the Federal Reserve cut interest rates. This usually leads to lower rates for other types of financing, such as mortgages and car loans.
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But the credit card to raise prices, even for customers who consistently pay. The bank may say that more balance is a greater credit risk and, therefore, must be the price. You can also say that you need to find other loss in number of accounts off. It can not. Banks are not required to show why change an interest rate on a credit card. The real reason for a bank to raise interest rates is simple: because they can. Period. The new rules do not object.
Credit card interest rates can change, because it is not a contract between the issuer and the user. Do you consider the difference between one of these accounts, and a mortgage. With a mortgage, is enforceable, the agreement with the circumstances the whole, which corresponds to a borrower. Think of all the papers the last time, if you have a mortgage. Everything is explained.
Not with a credit card. It could be a sign of demand, but that’s all. The conditions have not been agreed to by both parties. So the bank is free to create the conditions for their mood. Make sure that the interest on your mortgage jump from 6% to 26%, only because the payment one day late. He can not pass because it is not in the contract of mortgage. But with a credit card, there is no treaty.
Thus, while the new federal ordinance on paper could be beautiful, there is not much protection is enforceable. If banks feel, as an account is not enough revenue for the production, they are now even a new tax. Why should she do? Indeed, they can.
American consumers are, in this case. First, we are attracted to the use of their cards. Attracted by their reward with a status symbol of our wallet, but as real money. Your advertising attracts us to believe what a wonderful life that we can have our purchase, that the plastic card with the name of their bank.
Then begin to build balances. Then, set interest rates. Then the taxes. Anyone over balances. So, your credit is higher, as a pretext to secure your interest rates even higher, and to charge more fees. The cycle never stops.
There are many opportunities to break that cycle. First, to bring you the game, that the banks want us to play. The only winner in the game of cards, the Bank. Use the cards. You’ll be surprised how much money, using your card in your wallet.
Finding ways to pay, or the elimination of debt. Program for the Elimination of debt can be used to walk from the debt without bankruptcy. This may be one time in your life, but it may lead to a new start in your financial life. It may surprise you to know that life can be lived with cash, checks and credit cards.
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Tags: Business, Credit card, Federal Reserve System, Finance, Financial services, Interest rate, Loan, Mortgage