A lot of changes have been introduced in the credit card industry in recent times. A few of them are to stop the credit card issuers from exploiting the credit card customers while a few others have been introduced to prohibit the card issuers from making use of the loopholes. These reforms have brought a lot of benefits for credit card customers who can now feel safer from the strategies used by card issuers.
You can say no to increase in interest rates
It is now mandatory for the credit card issuers to give you advance notice before they increase the interest rates. Credit card customers have 2 options in this case. If they think the interest rate hike is too much, they can reject the increase, in which scenario, they will have to stop using the credit card and pay off the remaining debt in a stipulated amount of time. They can then apply for a credit card elsewhere. They can continue using the same credit card if they are fine with the interest rate. This is better than in the past where credit card issuers would simply increase the interest rates without the customers’ knowledge surprising them at a much later stage.
You can say no to increase in credit limit
Credit card issuers used to increase credit limit of customers in the past without their consent. A higher credit limit could make the customers spend more, which isn’t advisable from their point of few. As per the new rules, the card issuer will have to intimate the card holder about the proposed increase in credit limit. The card holder can choose to go with the increased credit limit or stick to the credit card with the older credit limit.
Credit card application fees
A major problem with credit cards for bad credit was that there were an initial application fees and then an activation fees and various other charges which used to eat into the credit limit available to the credit card customer. That has now changed with the new credit card laws that stipulate that the initial fees cannot exceed 25 dollars. For some time, card issuers went around this rule to introduce and application fees which took the overall fees above this mark. But not a new credit card rule has come into place that mandates that even the application fees and all other forms of fees should adhere to the 25 dollar limit.
Getting interest rates back to normal
Credit cards can increase the interest rate on the credit card if a customer makes late payments, as a penalty. However, with the new credit card rules not all is lost. Now if the customer makes payments on time for 6 months, they can get the interest rates back to the original mark.
Multiple fees cannot be charged
Card holders were exploited at one time where the late fees when added to the outstanding balance would take it over the credit limit thereby incurring another penalty. That cannot be done anymore.