Credit Card Report: Problems May Continue With New Rules

While many people are looking forward to the new credit card laws set to take effect early next year, a new report says they won’t solve all of the problems caused by difficult credit card practices.

The Center for Responsible Lending highlights several practices currently on the rise that won’t be addressed by the new laws. The Huffington Post digs deep into the reports to provide what could be called a credit card practices watch list for 2010.

These practices aren’t new, but up until this point they have not been widespread. In some instances, fees or rates which were low are now going up as credit card companies look for new sources of revenue.

What to look out for.

Minimum finance charges. Most credit cards carry a minimum for finance charges. For example, if the minimum charge is $5, then having $3 would on your statement would be the same as having $4. At the start of the decade, this minimum was 50 cents on most cards. Now, that has risen to $2 or more in many cases, and generates more than $430 million each year. If you often borrow money on your card, beware of these creeping charges.

Variable rate floors. In these instances, your variable rate can go up and up, but it may only fall so far. Before you sign on, see what your floor is to see what is the minimum monthly interest you could pay.

International transaction fees. A few years ago you could use your credit credit card overseas and for little or no extra charge. These fees are quickly rising among card companies. These fees are typically a percentage of your charge, and if you’re using them at hotels and restaurants and rental car companies a few percentage points can add up quick. These fees have gotten as high as 3 percent on some cards.

Balance transfer fees. Transfering your balance from one card to an account with a lower interested rate used to be a way to fight debt. But the report shows that now almost 75 percent of cards have no ceiling on the maximum fee you could be charged for the balance transfer. A few years ago fewer than half the cards had no ceiling. Read the fine print and think closely before moving your money.


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