Credit cards can often be a problem for many cardholders who allow their credit card debt to get out of control and, as a result, put themselves in a situation where they cannot pay off their balance from month to month and interest continues to compile making their total credit card debt larger. However, new credit card laws were put in place to give cardholders more information about the total amount they will owe if they continue to make minimum payments and stick with the repayment time frame their card lender has set.
However, a recent report on CNNMoney.com stated that the credit card companies who were subject to the Credit Card Accountability Responsibility and Disclosure Act have, for the most part, erased these practices that were deemed as deceptive on the part of the Federal Reserve. Yet, the CNN article also mentions that new fees have popped up in other areas, which many believe to be the way in which credit card companies are making up for lost income from practices that were banned. Examples are increases in cash advance fees and balance transfers, as well as, increases in penalty rates.
Despite these concerns, there are many who feel that individuals who have a high amount of credit card debt and wish to erase this credit card debt quickly still have opportunities to do so. These increases in rates for cash advance fees and balance transfers, among other things, are not something that many feel will make erasing credit card debt an impossibility. Financial advisers often counsel those who have credit card debt to simply practice financial discipline with their credit card use.
Advisers like Dave Ramsey are proponents of the method in which cardholders will pay off their smallest credit card amount first and work their way up. Credit card payment methods like these are used by cardholders who truly want to get a hold on their credit card spending and out of credit card debt as fast as they can. While many people have become dependent upon credit cards, certain fees can be avoided if a cardholder simply does not stand outside of their means.
While unemployment has been an issue, causing many to be reliant upon their credit cards to meet the most basic necessities, individuals who are in the financial position to do so can begin to budget their income in a way that allows them to only purchase amounts on their credit card debt that can be paid off quickly. While there are some ways which credit card companies can still charge fees for certain acts, troubles of the past like sudden increases in interest rates are no longer permitted.
Any cardholder who may be concerned about these types of credit card practices shouldn’t be negatively affected if they are simply trying to erase their credit card debt. Cardholders who are working to pay off one credit card at a time stands a better chance at getting out of credit card debt quickly now that certain practices are legal. Yet, cardholders are cautioned to be on guard against these reported practices that do not fall under the new credit card rules so that those who are trying to erase their debt will not fall victim.