Are consumers better off now than before the Credit Card Accountability Responsibility and Disclosure Act was passed?
Yes and no. There are some important protections for consumers and some loopholes big enough to drive a truck through. For example, you must be told how long it will take to pay off your balance if you only make minimum monthly payments. This provision will prove to be a real shocker for some consumers who don’t realize how many years it will take to pay off a small debt. If you make payments within 60 days of the due date, then your interest rate for current charges cannot be raised. However, this provision affects existing balances. There is no limit on how much your interest rate can be raised on future purchases. The only requirement is that you be notified 45 days in advance of the rate hike. If you don’t respond to the notification, then you have agreed to the new rate no matter how high. That is why it is so important to read all the information included with your monthly statement. What are the options for consumers if they don’t like the company’s new rates? Try to find a new
