New Credit Card Rules Favor Consumers

Local experts say the most immediate change you will notice is on your credit card statement.

"The statements will be cleaner, clearer--the interest rate will not be buried, like it has been," says Sandra Dunaway of Consumer Credit Counseling in Mobile. She says consumers will also be faced with something they may have never considered--how long it will take to pay off their balance by paying only the minimum payment.

"That opens up their eyes to exactly how long it will take and what the cost will be," she says.

Dunaway says the new rules are a win-win for credit card users. She says rules like putting an age limit of twenty-one on credit cards without a co-signer or proof of a job will help young people, many of whom had debt before they even had an income.

The new rules also say banks are supposed to stop soliciting credit card offers on college campuses--but they've already found a way around that.

"What they'll do is they'll have the fraternities and sororities man the both for them and then they'll give them a percentage of whatever they collect, or whatever--they find a way around it," Dunaway says.

Vicky Stringer, a twenty year veteran of the credit reporting industry says while the new rules restrict interest rate hikes and set limits for making changes to your card, most card companies began making changes before the rules took effect--changes like lowering credit limits.

"One of the things that can lower your credit score is when these credit card companies are reducing your credit line," she says.

For example if you owe five thousand dollars on a ten thousand dollar credit line, and the limit is reduced by the card company to five thousand, you're now maxed out. She says the card companies began that practice because of people who lost their jobs and lived on credit while looking for work.

"They've got a lot of people in foreclosure and in bankruptcy so they're eating a lot of debt right now," says Stringer.

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