KNOW YOUR CREDIT CARD RULES
By John Ingrisano
Director, Family Finance Conference Center
The devil is in the details when it comes to credit cards … and, no, it is not accident that you get notices in the mail every other month about “minor” changes to your credit terms. Does anyone really read those announcements?
Well, here is one update: The credit card rules have changed … again. Under the 2009 Credit Card Accountability, Responsibility and Disclosure (CARD) Act, which went into effect last year …
- If your card has several rates (such as through a promo or transfer offer), payments above the minimum must be applied to the highest interest rates. In the past, it was common for card issuers to credit payments to low rates first, keeping you paying interest on the higher rates. So, this rule can save you a ton of interest.
- Rate increases cannot be applied retroactively to existing balances unless you are delinquent on your bill.
- Your children under age 21 can no longer apply for a card alone. You must co-sign the application.
- The issuer cannot automatically charge a penalty if you exceed your limit (though your interest rate can be hiked).
Note: These are just some of the newest rules. There is always fine print. We recommend that you take some time to actually read it.
Also, note one big exception: The above rules only apply to consumer cards, NOT to business cards.
The best idea of all: Put away your credit cards completely. If you cannot afford to pay cash, then you cannot afford to buy it. Period.
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Want to learn more about how to get the biggest bang for the money you save and spend? Check out The Back to Basics Book of Money! A Couple’s Guide to Financial Peace. The book contains 10 valuable Couple Money Skills. Plus, the Back to Basics Book of Money Workbook (which dovetails with the main text) offers 31 practical, hands-on Wealth Builder activities that can help you and your partner build financial and domestic stability. Both the book and workbook, which retail for $31.98 plus S & H, are available at the Family Finances Conference Center website for $27.99 total.
The Family Finances Conference Center tailors programs to the unique and individual needs of client organizations and their members and employees, based on the principles of the book and workbook set, The Back to Basics Book of Money! A Couple’s Guide to Financial Peace.
209 Church Street
Algoma, WI 54201
John Ingrisano is a business journalist, public speaker, author of The Back to Basics Book of Money! A Couple’s Guide to Financial Peace, and director of the Family Finances Conference Center. He can be contacted at (920) 559-3722.