New Credit Card Rules to Limit Abuse

Looking for a Credit Card for Christmas Shopping? Before you submit a credit card application, first review the main points which will help you choose the right credit card for your needs.

What Charges You'll Make - If you're going to use the credit card mainly for booking airline reservations and hotels, it might be best for you to get a travel credit card that offers sky miles and hotel points or cashback. If this will be an emergency credit card only, then your main concern may be for a low interest rate credit card with low fees.

When You'll Repay Charges - Will you pay off credit card charges in full every month, or will you carry a balance month to month? If you're going to carry a balance, you want the lowest possible interest rate as well as a low introductory rate. But if you'll payoff balances in full every month, then interest rate really doesn't matter so no annual fee and/or a long grace period would be a bigger concern. If you're going to carry a balance, be concerned about how the finance charge is calculated. The most common method is the Average Daily Balance, which means that the daily balances are added together and then divided by the number of days in the billing cycle. Stay away from credit cards that compute the balance using two billing cycles, as this method costs more money in financing fees.

What Amount You'll Charge - If you're going to use the credit card for all your monthly expenses, then you need a card that has a high credit limit and a high cashback percentage.

More info about Interest Rates, Credit Limits, Incentives, Fees and Penalties

Interest Rates - The interest rate (Annual Percentage Rate) APR can either be a fixed rate or a variable rate that is tied to another financial indicator, most commonly the prime rate. With a fixed rate credit card you know what the interest rate will be every month, whereas a card with a variable rate can fluctuate. Of course, even the interest of a fixed rate card can change based on certain events, such as paying your credit card bill late, exceeding your limit, or simply because the credit card issuer decides to change it after providing you ample advance notice.

Credit Limit - This is the amount of money the credit card company will let you charge to the card. This amount varies depending upon the card offer and your credit history. Be sure to get a credit card with an ample limit, because getting close to your max can hurt your credit score. Just remember that you don't have to max out your limit just because it's available.

Incentives - To compete for and to gain customers, many credit card companies offer rewards. Even if you normally use cash, why not use your credit card and then use the cash to make the payment during the grace period? You still won't pay interest and meanwhile you'll rack-up rewards. A credit card with 5% cashback will earn you $5 for every $100 charged. If your total bills come to $2,000 per month, you'll earn a free $100 every month. Look for a rewards program that you'll use and which offers flexibility, such as cashback or travel.

Fees and Penalties - Compare common charges such as late fees, overlimit fees, balance transfers, cash advances, and for making payments by telephone. Regarding balance transfers, look for credit card offers with no transaction fees and zero percent interest for at least 12 months.

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New Credit Card Rules to Limit Abuse

By Credit Federal | Published 01/5/2009

New credit card rules limit abuse and protect consumers from interest rate increases on existing balances. The new rule takes Effective July 2010, Interest rates can be raised only on new credit cards and future purchases, advances and not on current balances.

In addition, a payment can not be considered late unless the borrower is given a reasonalbe repayment time such as 21 days. Security deposits and fees for issuing credit or making it available can be considered unfair practices. With the current problems of recession and job losses- even those with good credit have been defaulting on credit which is an area of concern and the fact that the rules will not take affect until 2010.

The Federal Reserve, the Treasury Department's Office of Thrift Supervision and the National Credit Union Administration approved the Rules. These changes will end the years of interest rate increases and inadaquate time repayment that consumers have endured.Consumers will be protected and have credit that is more fair. On the other hand, Where does that leave consumers who have bad credit and apply for subprime credit cards that have high interest rates because of the greater risk to the issuer? Will it be more difficult for them to get a subprime card?

Now when higher rates will be charged, consumers must receive notice 15 days notice. With the new rules, notice must be given 45 days in advance befor changes are made to the terms of the account.

While rules are good to have, unfair practices can still reign. Having new rules is at least a beginning to end abuse.

Browse for a good credit rewards card or for a bad credit card to rebuild credit.

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New Credit Card Rules to Limit Abuse - by <a href=http://creditfederal.com>CreditFederal.com</a> <div style="text-align: left; font-family: Verdana;">New <a target='_top' href="http://creditfederal.com/credit-card.html">credit card</a> rules limit abuse and protect consumers from interest rate increases on existing balances. The new rule takes Effective July 2010, Interest rates can be raised only on new credit cards and future purchases, advances and not on current balances. In addition, a payment can not be considered late unless the borrower is given a reasonalbe repayment time such as 21 days. Security deposits and fees for issuing credit or making it available can be considered unfair practices. With the current problems of recession and job losses- even those with good credit have been defaulting on credit which is an area of concern and the fact that the rules will not take affect until 2010. The Federal Reserve, the Treasury Department's Office of Thrift Supervision and the National Credit Union Administration approved the Rules. These changes will end the years of interest rate increases and inadaquate time repayment that consumers have endured.Consumers will be protected and have credit that is more fair. On the other hand, Where does that leave consumers who have bad credit and apply for subprime credit cards that have high interest rates because of the greater risk to the issuer? Will it be more difficult for them to get a subprime card? Now when higher rates will be charged, consumers must receive notice 15 days notice. With the new rules, notice must be given 45 days in advance befor changes are made to the terms of the account. While rules are good to have, unfair practices can still reign. Having new rules is at least a beginning to end abuse. Browse for a good credit <a target='_top' href="http://creditfederal.com/rewards-credit-card.html">rewards card</a> or for a <a target='_top' href="http://creditfederal.com/bad-credit-card.html">bad credit card</a> to rebuild credit. </div> This article provided courtesy of <a href=http://creditfederal.com target=_new>www.CreditFederal.com</a>, a personal credit resource of good or bad credit credit cards and loans.

Credit Tip: Need a high limit for Christmas credit card charges? If you have bad credit, consider a personal loan by refinancing your mortgage. Even if you have cash to buy Christmas presents, we recommend using a prepaid card to make purchases because it's safer than carrying cash.