What the CARD Act Could Mean to You

stockxpertcom_id292727_jpg_d42b7d9ea53f2f95c99cd871c33ad3deCredit card holders across the U.S. are rejoicing because the restrictions on card issuers will soon come into effect. Many of the provisions will provide consumers with much needed relief.

But don’t count on these new regulations to prevent every unfavorable action by credit card issuers.

Even after the law becomes effective on February 22, you’ll still need to keep a careful watch on all correspondence from the bank, and you’ll still need to be vigilant in order to maintain your credit scores. So continue to read everything the bank sends, and check all the figures on your statement monthly.

Credit card issuers will retain the option to reduce your credit limit, close your account entirely, or add some new fee. And with regard to new fees, it’s safe to assume that most banks will add them in an effort to increase their profits, and some banks have already begun to do so.

For instance, some banks are charging a fee of $19 after 12 months of inactivity. Citi is tacking on fees of up to $90 on some accounts that don’t meet annual spending thresholds.

Since high credit limits that aren’t being used do positively impact your credit scores, you should take steps to keep all of your accounts open and their credit limits high. In fact, it is a good idea to ask for limit increases right now – before the new laws come into effect and make it tougher. Under the CARD Act, issuers will not increase credit limits unless they consider the consumer able to make required minimum payments using all of their available credit.

In order to keep all of your available credit lines open you should use every credit card you own, at least once every calendar quarter, because some banks are simply closing unused accounts.

Contrary to what you might think, you don’t need to carry a balance to keep your credit card issuers happy with you. While they would like to earn interest on your balance, they still make money from the vendors every time you use your card. This is a fee of 1 to 3 percent of the purchase price, depending upon their agreement with the vendor.

So use that card for a few routine purchases and then pay it off when the bill arrives. Even if you don’t plan a credit purchase in the near future, keeping your scores high is in your best interest.

Author: Marte Cliff
CreditScoreQuick.com your resource for free credit reports, credit cards, loans, and ground breaking credit news.

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Disclaimer: This information has been compiled and provided by CreditScoreQuick.com as an informational service to the public. While our goal is to provide information that will help consumers to manage their credit and debt, this information should not be considered legal advice. Such advice must be specific to the various circumstances of each person's situation, and the general information provided on these pages should not be used as a substitute for the advice of competent legal counsel.