Some credit card companies went to extraordinary lengths to cause cardholder payments to be late. For example, some companies set the date to August 5, but also set the cutoff time to 1: 00 pm so that if they received the payment on August 5 at 1: 05 pm, they could consider the payment late. Some companies mailed statements out to their cardholders just days before the payment due date cvv dump sites so cardholders wouldn’t have enough time to mail in a payment. As soon as one of these tactics worked, the credit card company would slap the cardholder with a $35 late fee and hike their APR to the default interest rate. People saw their interest rates go from a reasonable 9. 99 percent to as high as 39. 99 percent overnight just because of these and similar tricks of the credit card trade.
The new rules state that credit card companies cannot consider a payment late for any reason “unless consumers have been provided a reasonable amount of time to make the payment. ” They also state that credit companies can comply with this requirement by “adopting reasonable procedures designed to ensure that periodic statements are mailed or delivered at least 21 days before the payment due date. ” However, credit card companies cannot set cutoff times earlier than 5 pm and if creditors set due dates that coincide with dates on which the us Postal Service does not deliver mail, the creditor must accept the payment as on-time if they receive it on the following business day.
This rule mostly impacts cardholders who often pay their bill on the due date instead of a little early. If you fall into this category, then you will want to pay close attention to the postmarked date on your credit card statements to make sure they were sent at least 21 days before the due date. Of course, you should still strive to make your payments on time, but you should also insist that credit card companies consider on-time payments as being on time. Furthermore, these rules do not go into effect until 2010, so be on the lookout for an increase in late-payment-inducing tricks during 2009.
Did you know that your credit card account likely has more than one interest rate? Your statement only shows one balance, but the credit card companies divide your balance into different types of charges, such as balance transfers, purchases and cash advances.
Here’s an example: They lure you with a zero or low percent balance transfer for several months. After you get comfortable with your card, you charge a purchase or two and make all your payments on time. However, purchases are assessed an 18 percent APR, so that portion of your balance is costing you the most — and the credit card companies know it and are counting on it. So, when you send in your payment, they apply all of your payment to the zero or low percent portion of your balance and let the higher interest portion sit there untouched, racking up interest charges until all of the balance transfer portion of the balance is paid off (and this could take a long time because balance transfers are typically larger than purchases because they consist of multiple, previous purchases). Essentially, the credit card companies were rigging their payment system to maximize its profits — all at the expense of your financial wellbeing. The tidal wave of consumer debt accumulating from unchecked personal credit card debt threatens to overwhelm our nation even as the lenders themselves reap the benefits. Americans have grown addicted to spending without care for their own income and budgets are something our grandparents used to employ. As a nation, we have almost lost track of the notion of saving for the future – aside, of course, from the exceedingly wealthy who no longer bother with banks within the united states – and our economy suffers as a result. More to the point, our citizens suffer as well from the drop in property values and rise in unemployment that are direct results of the consumer debt explosion. Credit card bills are killing this country, and it is past time that we do something about it.
It is more than understandable how this all happened. Just turn on the television: every other commercial advertises either the untold benefits from plastic purchasing (The sheen! The class climbing! The convenience! ) or the consumer credit counseling surgical practicalities (The desperation! The condescension! The oh so marketable convenience! ). Somehow, along the way, the average American household managed to rack up around eight thousand dollars in unsecured debt almost wholly from credit card usage. The past decade, as home appraisals skyrocketed and well paying jobs could be plucked from the vine, there was not much reason to worry. This was the American millennium, after all, and things would never change.
Somehow, an unprecedented period of economic expansion came to an end, and the real estate bubble finally burst. And, more to the point, a good number of borrowers found that they were having trouble making even the minimum payments upon their various credit cards. Who knew? The tyranny of unsecured debt has at last seeped into the household accounts of most of our citizenry and the effects are everywhere. Beyond the new budgeting, though, and the tightening of belts, families need to take a close and educated look at their credit card problems and see what can be done. There are a number of debt managements solutions that have arisen in the past few years purely to deal with such situations although the simplest debt relief is the most annoying: a halt to purchases. Serious attention paid to expenses and savings accounts are the foundation of any lasting credit card debt relief.
Above all else, families must stop spending without regard to the future. Heads of household should collect all credit cards and, while not necessarily setting them aflame, at least keep them tightly locked away from the grasp of misguided purchases. One of the greatest problems facing consumers is this culture of commercialism. Credit cards really are an addiction, and otherwise ordinary people will find themselves driven to buy something they do not really want simply because they are depressed or worried. This is precisely the sort of action that the credit card companies are counting upon. This is the reason that the credit card companies offer new accounts at rock bottom rates to borrowers just exiting Chapter 7 debt elimination bankruptcy even if the borrowers successfully washed away debts owed to the same credit card companies. They figure the borrowers will be all too likely to resume past spending habits – this time, without hope of bankruptcy protection for near a decade – and, more’s the pity, the credit card companies tend to be correct.