Card Act 2009

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Pay $1 For Your Credit Card Statement

Private-label credit cards for stores such as Ann Taylor and Victoria's Secret are now implementing a $1 fee if you want your credit card statement mailed to your home as of February 22nd. In order to avoid the fee, lenders want card holders to opt in for online credit card statements.

Lenders claim the new Credit CARD Act of 2009 require a number of new disclosures be included in each card statement and the extra paper is going to cost them. Watch dog groups warn that lenders will keep trying to come up with new and exciting ways to add additional fees to your bill in order to recoup some of the money the new act is causing them to lose.

The purpose of the Credit CARD Act of 2009 is to make lending practices more transparent. Retroactive interest rate hikes and other hidden fees are a thing of the past. Lenders are expected to lose as much as $50 Billion in revenue due to the loss of their old bill padding strategies.

Offline Credit Card Statement Fees Will Hurt The Elderly The Most

Since the fees apply only if you want a physical statement in the mail its expected that the elderly who have not fully embraced all our current technology will be hit the hardest.


Lender Fees Exposed
So remember the CARD Act that was supposed to help protect consumers from unscrupulous lenders and all their hidden credit card fees? It seems some lenders have already found new ways to whack us over the head with additional fees. Take a look at some of their new methods for collecting more than what you had bargained for...

Interest Rate Games

1. The CARD Act stipulates that fixed rate credit cards can't become variable cards as long as they are paid on time, but if you have a variable rate card you're in for a ride. In the past, variable rate cards were tied to the prime rate. Lenders are now adding a clause that they can use the highest prime rate in the past 90 days. That's an estimated $720M in new revenue for them, right out of consumer pockets.
2. A second new strategy targeting those with variable interest rate cards are the new "floor" interest rates. If your card has a "floor" rate of 6% and the prime dips below 4% for 4 months, you won't benefit from the 4% prime rate as your floor rate is 6%.

Fee Games

1. Lenders are now implementing a higher minimum finance charge. That means if you only incurred an interest charge of $4 in any given month, but their minimum finance charge is $20, then you'll have to fork over another $16.
2. You know how you used to get hit with a $25-$45 late fee when you paid late? Those late fees are now increasing in size in proportion to your credit balance.
3. Think you'll avoid these charges by not using your card? Think again. Lenders are now implementing an inactivity charge. Fees vary by lender.
4. If you travel to foreign countries you are familiar with foreign transaction charges you would incur anytime you exchanged currencies. Now you may incur these charges even if no currency is exchanged provided a foreign bank is involved.
5. And lastly, they've removed the caps on balance transfer fees and increased the minimum charge. That means they can charge you for an entire year of interest upfront on that 0% balance transfer.

The lesson here is that lenders are rewarding those with good credit and payment history, but miss just one payment and you're in for a world of hurt. You'll be hit with a veritable tidal waive of fees that will make you wish you never applied for a credit card in the first place.

My advice? Keep just 1-2 cards with minimal balances and pay them in full each month with an automated payment plan.

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