As the deadline for the new credit card laws quickly approaches, credit card companies will be sending out details on how the CARD Act will effect your credit card account. Some companies may include revised terms and conditions in your monthly statement. Other companies may send out notices that can easily be mistaken for the credit card solicitations many have grown accustomed to throwing in the garbage. Either way, it is crucial to carefully review all communications from your credit card companies, especially if they are tied to accounts you rarely use.
Recently, some credit card companies began instituting minimum monthly finance charges or paper statement fees of around $1 per month. Paper statement fees of $1 may seem unfair, but are completely legal under the new credit card laws. Furthermore, than can create surprisingly expensive problems. For example, if a department store credit card a person rarely uses and has a $0 balance decides to charge a $1 paper statement fee, failing to pay the fee can lead an account to become past due.
Once a credit card account becomes past due, a penalty fee can be imposed. This can turn a $1 balance into a $30 credit card balance very quickly. To make matters worse, if a person fails to pay off the new balance created by the fees within 30 days, the credit card company will likely report that person as delinquent to the major credit bureaus. This, in turn, can damage a person’s credit score and increase their cost of borrowing for everything from car loans to mortgages.
As many people learned the hard, failing to pay close attention to every credit card account they have can have disastrous consequences. By opening every piece of mail that arrives from credit card companies, consumers can avoid costly headaches and protect their credit scores.
Jennifer Davide
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