Sneakiest New Credit Card Tricks

From Marketwatch.com....

The new Credit CARD Act, passed last year, handed credit card companies a long list of new consumer-friendly regulations. But it hasn’t taken long for card issuers to find sneaky ways around the new rules, says John Ulzheimer, head of consumer education for Credit.com.

The new rules are going to cost the credit card industry somewhere between $50 billion to $80 billion a year, he says: “That’s enough money that they’re going to have to make it up” in other ways.

Two ways you’ll be paying more: higher annual fees and interest rates. “The average interest rate on a new card is up [one percentage point] over the same period of time last year,” Ulzheimer points out.

But in addition to straightforward fee and rate increases, credit card companies will probably be able to boost their top line with other, less obvious moves.



“I have to give the CARD Act a solid C+,” says Ultzheimer. “The hypothesis was solid. [But] at the end of the day we’re not fully protected as we were promised we would be, and we’re all paying more for our credit.”

Here are a few of the things to watch out for.

Weekend charging: The new rules say if a due date falls on a weekend or holiday when the bank is closed, you can pay your bill on the next business day and not be hit with a late fee. But banks are keeping a few branches open on weekends, just so they can charge that fee.
What that means for you: If your due date falls on a holiday or a weekend and you want to avoid a late fee, pick up the phone and ask your bank whether they have branches open. Or better yet, beat the due date by a week — then you won’t have to worry about it.

Fee and rate changes: Credit card companies can no longer arbitrarily increase rates or fees; they now need to notify you 45 days in advance. And if you choose to, you can actually opt out of the change. But be careful: If you carry a balance and you opt out, they can close the account and accelerate the payback by increasing your minimum monthly payments. It may make the payment unaffordable.
And by all means read those notices when they do turn up: According to a Credit.com survey, 97% of customers are ignoring them, Ulzheimer says.

College gotchas: The new rules say that if you’re under 21, you can’t get a credit card unless you have a parent co-sign or can show proof of a job that would allow you to pay your bills. But card companies seem to be looking the other way when classmates act as co-signers, says Ulzheimer.
“We’re also hearing — this is terrible — that student loans are being considered ‘income,’ because they are being paid to the student rather than the school.” Net result: Students are not getting the protections the CARD Act intended.