Posted on May - 01 - 2010
Credit Card Tips: Ways to Manage Debt Under New 2010 Regulations
Now that new credit card regulations are in place, card companies have become more transparent about explaining to consumers the mechanics of credit card use. The new laws that went into effect in February of 2010 were passed to help protect consumers from being overcharged on their credit cards, having their payments credited too late, or being forced to pay extra steep interest rates on their card balances.
The new credit card laws require, for example, that card issuers apply payments made by cardholders differently than they used to. So rather than the card companies charging higher interest over a longer period of time the money paid on a credit card can be applied sooner toward debt reduction. The way that is done is that when you make the minimum payment due it now must be used to reduce your highest interest rate balance first. Banks used to apply that kind of payment to the lowest interest rate balance so that it got paid down faster, which left you still paying the higher rate on the debt you carried forward month to month.
Several cards have turned this new legislation into a marketing asset, by using the new regulations in a creative way that actually benefits the cardholder even more. With cards like the Slate from Chase, for example, you can easily figure out what expenses or purchases you want to pay off first, and then the card helps you to do it automatically. You can set up your own individual payment plan with these kinds of card features, and as you schedule your payments you can monitor your progress.
Just review your account online, for instance, to instantly find out what debt you are paying off and how much money you are saving by eliminating debt that charges high interest. You can also use these handy new card features to automatically pay for some designated purchases in full every month, so that you never have to pay interest on those items. If you buy gasoline each month with your card, for example, you can set up the account so that none of your gasoline purchases are carried forward. Select from the menu of plans to establish the one that works best for you, and start managing and saving by leveraging the power of these new credit card balance budgeting tools.
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