Credit Card Laws May Prevent Many From Needing The Services Of A Chicago Bankruptcy Attorney

24-Jan-2011 Credit card debt is extremely common in this country. It is also a frequent cause for someone to file for bankruptcy. A big reason why credit card debt is so damaging is because of the confusing fine print, high interest rates, fees and penalties.

Nearly $40 late fees, sky rocketing finance charges and hidden fees are a thing of the past.

Credit card companies have finally been forced into fair business practices with President Obama's approval of the Credit CARD Act becoming a law. The law was approved on May 22, 2009 and all the phases of it were completed by August 2010. The last part of the plan to be implemented was the consumer protection laws.

The new law effects the way credit card companies handle their transactions. For example, in the past any credit card that charged an annual fee was considered a luxury. There were so many to choose from that had no fees and still offered great rewards, there was no reason to pay annually. Now that credit card companies are under closer scrutiny it will become much more likely that your credit card will charge you an annual fee.

In addition card holders will see a decrease in cards that offer desirable rewards. This is due to the decrease in revenue the companies will bring in under the new law.

It will be harder for anyone under 21 to obtain a credit card and most will need a co-signer in order to qualify. Someone with a low credit score will also find getting a new card more of a challenge.  This may increase the use of secured credit cards.

Other than the loss of rewards and the addition of the annual fee, most card holders will see many benefits in this new law. For example, debtors will be given a longer window within which to pay their bill. The credit company will be required to give debtors at least 21 days to pay their bill after it arrives. Interest rates will not be able to change without good reason and late fees will stay at $25 or less unless you are frequently late.

One major change to the credit card statements is that they will all have a clearly outlined table that explains the timeline for paying off your balance if you only make the minimum payment. Seeing this in writing will show people how much more they are paying for the items they buy when the do not pay their balance in full.

In time these new credit card laws are very likely to improve consumer credit scores and make it easier for people to stay out of debt and avoid bankruptcy.

Chang and Carlin
The content found on the Chang & Carlin site is not legal advice and is purely for informational purposes. The information contained herein is not a substitute for the advice of an attorney and does not create an attorney-client relationship. If you are interested in obtaining information about chapter 7 bankruptcy, chapter 13 bankruptcy, foreclosure services, real estate legal services, you are encouraged to call our law firm at 866-790-8601 or Request a Free Legal Evaluation. Chang and Carlin serves clients in Chicago, Schaumburg, Joliet, Warrenville, Waukegan, Illinois.