What Consumers Should Know About Credit Cards

by Adam J Krohn on June 13, 2013

(US law and generally) Credit cards can be very useful if used correctly.  However, if they are not, they can get you into a world of trouble.  On average, an US household holds about $16,000 in credit card debt.  Due to the economy, more and more debt collectors have been retained by these credit card companies to collect on the debts.  This has lead to abuse and aggressive tactics which have, in turn, increased the amount of debt collection harassment complaints.  Regardless of how much debt you owe, there are some important things you should know about your credit card.

First and foremost, the Fair Debt Collection Practices Act (“FDCPA”) will be there to prevent these abuse acts from debt collectors.  Within the FDCPA, there are many sections that apply to protect debtors from these aggressive collectors in which an experienced FDCPA attorney can use to protect your interests.

There is not a limit on how high credit card issuers can increase a consumer’s interest.

Consumers usually open a credit card at a great interest rate.  However, the bank that actually issues the credit cards are not bound by the state laws that limit interest rates and can make the interest rates whatever they want.  Under the terms and conditions of most credit cards the interest rate stays at the low rate for just the first year.  Once a consumer has had the credit card for longer than that, the credit card company is under no obligation to keep the interest rate low and can raise the rate.

Consumers can refuse to accept the new rate

If a credit card company decides to hike the rate of a consumer, the consumer can say “no.”  If the consumer does this, the credit card company may make a deal and let him or her stay at the old interest rate.  It is important that the consumer obtain this in writing.  However, it is more likely that the credit card company will decrease the amount of your credit line, increase your minimum monthly payment, or just close your card.  If the credit card company closes your card after you have refused to accept the new interest rate it cannot demand that you pay off the entire bill in a short amount of time.  You should have five or more years to pay off the amount owed at the old rate.

Consumers have some protections given by their credit cards

Some credit cards come with protections.  If you never receive something you purchased online, ordered something in the store but that is not what you received, or find an unauthorized charge on your bill, credit cards will protect you against these problems.  If a person makes purchases you did not authorize on a card that you lost or was stolen, the extent of your liability is $50.  If you are unsatisfied with a purchase you made, you can seek a refund.  However, the cost must be $50 at a minimum and it must have been purchased within 100 miles of your home.  Additionally, you must have first attempted to fix the matter with the company.

A consumer’s interest rate may not always be fixed

Just because a consumer’s has a fixed interest rate right now does not mean that it will always be fixed.  Fixed rate cards can become variable-rate cards in the future.  A credit card issuer can change the interest rate as well as how interest is calculated.  However, the credit card issuer must give the consumer at least 45 days’ notice of the change.

No-limit credit cards can leave consumers with tricky balance issues

Credit cards with no spending limits may limit the amount of money a consumer can carry over from month to month.  If you spend more than the carry over limit you are on the hood for the difference.  It is important to carefully read the terms and conditions so you will know if there is a carry-over limit and what that limit is.

Getting to the point of defaulting on your credit cards can lead to debt collectors calling to collect.  Knowing the facts about credit cards above can help prevent this but if it comes to the point that you have defaulted on your credit cards and debt collectors are contacting you it is important to know your rights under the FDCPA.  It is also important to know your credit report, because there can be errors on your credit report that you do not know about that you will need to handle this way.

We understand the frustration you may have when dealing with an aggressive debt collector. We have been successfully representing those abused and taken advantage of by debt collectors for years, and have a long list of successful stories to share with you. We offer a FREE CASE REVIEW for you to assess whether we can assist you with your matter. Please do not hesitate to contact us toll free at 1-800-875-3666 if you prefer to talk to a trained professional over the phone instead, or of course, visit our website at http://www.westopdebtcollectors.com/.

Adam J Krohn
Adam J. Krohn is one of the founding partners of Krohn & Moss, Ltd. Consumer Law Center® He has been admitted to practice law in Illinois, Missouri.
Adam J Krohn
Adam J Krohn

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