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MUST READ: Watch Out For The New Credit Card Traps (CNN.com)
If you haven’t heard, big changes are here for the credit card industry. On Monday the CARD act goes into effect and consumers finally get some relief from such practices as “double-cycle billing” and arbitrary rate increases.
The new act, which was signed into law last May, promises consumers more transparency about their credit card bill. But cardholders still need to watch out for a whole new series of traps and tricks
Higher fees: For starters, consumers could suddenly find themselves socked with a variety of new fees and charges.
Banks and other card issuers have already been aggressively implementing new fees or raising existing ones to help make up for any potential revenue lost as a result of the CARD Act.
Last May, for example, Discover Financial Services (DFS, Fortune 500) announced it would start charging a 2% fee on all purchases made outside the United States.
And whereas 3% was once the standard charge for rolling over a balance from one credit card to another, issuers like JPMorgan Chase (JPM, Fortune 500) are now assessing customers a 5% fee, according to Bill Hardekopf, CEO of the card rating site LowCards.com.
But with the new law setting no restrictions on the types of fees issuers can implement, consumers should pay particularly close attention to the “Terms and Conditions” section of their statement so they know exactly what they are being charged for, warn experts.
