July 1, 2009 Dollars & Sense
July It's a good time to review the terms of your cards. President Obama signed the Credit Card Act of 2009 into law on May 22 and, much to the delight of consumer advocates, many of its key provisions stayed intact through the legislative process. But the new regulations don’t go into effect immediately and some credit card companies are using the intervening months to lower your credit limit, boost minimum payments and raise rates. Many companies will also raise your rate if you make a late payment. Some companies also practice universal default, sharing negative information with your other creditors who may raise your rates even if your payments to them are current. For these reasons and numerous others, it’s a good idea to pay careful attention to the fine print on your credit card bills as soon as they arrive.
Your Credit Union has never used such predatory tactics.
What to look for now
Here are a few things to check when your credit card bills arrive:
• Your interest rate – it may have risen since your last billing statement.
• Whether there are different rates, and if so, for what: purchases, cash advances or balance transfers.
• The order in which payments are applied to different types of transactions. (Some banks pay off low interest balances first so the high interest rate balances stay on your account longer.)
• Whether the rate could increase to a higher penalty rate, and under what circumstances, such as a late payment on this card or any other card.
• Annual fee, late fee, and over limit fee amounts, and when they are charged.
• Whether any other fees are charged and when.
• The grace period, or number of days from the billing date you may pay in full without incurring finance charges.
What makes SLFCU credit cards different?
• No annual fee and no fee for paying online.
• Year-end cash rebates on Visa Gold, Classic and MasterCard.
• Cash advance rates the same as rates on purchases, unlike other cards.
• 25 day grace period.
• No balance transfer fee.
• Free car rental and travel accident insurance.
• Free travel and emergency assistance service.
• Free extended warranty protection when you use your Visa Gold Card.
• No minimum finance charges.
• No penalty rate. (Some companies increase your rate to 26.15% plus the prime rate if your payment is late twice within the year.)
• No universal default. (Some companies share negative information about you with your other creditors who may raise your interest rate as a result.)
• No double cycle billing. (Some lenders charge interest on credit card debt a consumer has already repaid.)
Ask a financial services representative to help you transfer the balances from your high rate cards to a low rate SLFCU credit card today.
Sources: Wall Street Journal and Judy Dahl, Credit Cards: Switch and Save at the Home and Family Finance Resource Center.
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