We have all heard that the recession is “ending” but I know most of us are still feeling the pinch! With the Holidays coming up some will be tempted to dust off those credit cards and start using them again. For others, your credit card is what has been keeping you afloat in this uncertain financial time. Either way you need to know your rights when it comes to your credit card(s).
1st thing I want to make clear to you is that the credit card companies are depending on you NOT paying attention. I say wake up, get aware and take control! There is a ton of information I want to make you aware of… everything from identity theft to unfair credit practices… but in this article I am going to focus on your consumer rights and responsibilities. I want to give you some things you can take action on NOW to be aware and in more control of YOUR credit.
The government has made some improvements in Legislation to help protect the consumer, however it is still your responsibility to manage your credit score and pay attention to your credit cards (both business and personal). Some of this legislation is in effect now… some will not go into effect until February of 2010 or July of 2010. Knowledge is Power! Paying attention and putting that Knowledge into action is empowerment! So here are a few things you should know about your rights.
What you need to know about your rights regarding Payments:
Credit card companies must apply your payment the day it arrives. Now having said that it again is YOUR responsibility to check when your due date is. Some unfair practices “trick” you into paying your credit card late. Federal law requires that credit card issuers mail you your statement at least 21 days before the due date (this is an increase from 14 days before the bill is due). Your due date can change from month to month so DON’T assume your due date is always the 10th of the month. Even a few hours late and you will be slapped with a late fee and probably a rate increase. Some companies are sneaky by moving your due date and hoping you won’t notice.
What can you do about it? If you are still getting a statement mailed to you OPEN IT IMMEDIATELY! Check the due date. If you’re credit card company offers it, get online statements e-mailed to you. Be sure you enter the credit card company’s sender address so the statement notification does not go into your spam/junk folder. Some credit card companies now offer “due date alerts” that will be e-mailed or text to you a few days before your payment is due. Once your payment is made be sure to check that the payment was in fact posted the day it was sent. If you are still mailing your payment mail your payment at least 10 days before the due date.
Do your best to pay even just a little MORE than the minimum due each month. As part of the new legislation credit card companies will soon need to disclose in the statement the consequences of paying only the minimum payment each month including how long it will take you to pay off the debt and an estimate of how much interest you will be paying over time if you do only pay the minimum.
Keep those confirmation numbers if you pay online! Most of us are choosing to pay many of our bills electronically. This is a great way to be sure your payment is posted on time. When you do make a payment on line you will get a confirmation number. I encourage you to copy and paste this confirmation number right into the memo line of your credit card payment within your Prosperity portfolio. This way you will be able to easily look it up without having to print it out and dig through piles of paper if you should need to prove your scheduled payment.
What you need to know about Rate increases and late fees:
Credit card companies are waiting for the slightest slip up on your part to increase your rate. But your rate can be increased even if you are not in default or late in any way. Did you know you can reject changes in your card agreement? A credit card company is required to provide you with written notice when it changes any term in your card agreement. Part of the new legislation requires the information to be written in plain English and in at least 12pt font size eliminating the “fine print”. What does this mean for you? Well if your credit card company notifies you that they intend to increase your credit limit (due to no fault of yours) you can contact them and refuse the new terms. Although calling is easier… it is a good idea to refuse in writing. Act as soon as you get the notification. There is always a time limit for refusing new terms. As of now there is no legislation or rules as to HOW they notify you… it could be written on your statement, you could get a letter or a post card… It could look like junk mail… there is no set way they must notify you. So pay attention!
A word about those nasty late and over-the-limit fees. Did you know that much of the credit company’s income is as a result of these penalty fees? $29 here and $39 there really adds up. 1st do your best to prevent your payment from being late in the 1st place. BUT you need to pay attention to your statement again and look for these penalty fees. If you do get one it does not hurt to call your credit card company to request the fee be reversed, especially if you usually pay your bill on time. You’ll want to be sure to ask if the late payment has resulted in a rate increase and ask that that be reversed as well if possible. It’s also a good idea to send a written letter in addition to the call.
Pay attention to your interest rate! It’s your responsibility to pay attention! My tip here is when you enter your interest paid/finance charge in your Prosperity portfolio… enter the APR % right in the memo line. This way you can look back through your register easily to compare month to month. It also reminds you to be checking that month to month on each statement.
Bottom Line here… You must pay attention! It is up to you to be proactive about YOUR credit health. Don’t take these unfair practices lying down… FIGHT BACK! LOOK at your statement, reconcile your credit card accounts just like you would your checking account. Check your APR % rate. Look for late or over limit fees. Look for fraudulent charges. A credit card company cannot hold you liable for fraudulent charges and some fees can easily be reversed but there is a time limit for you to dispute them. If you find an error or fee on your statement you feel is unwarranted… Dispute it! Call to confirm the information, request reversal of fees, etc. but also send it in writing.
Remember, Credit cards fall under the same rule as the rest of your money… You need to be vigilant and pay attention. When you spend on your credit card spend intentionally. Don’t fall into the trap of spending more than you are making. Tell your money where to go so you don’t wonder where it went!