Credit card companies will be bound by tighter restrictions on rate hikes and fees as well as increased disclosure requirements will become mandatory.
Along the same lines, borrowers will need to become familiar with these changes and key provisions in the law and what it ultimately means for them.
For example, while the new rules will clamp down on retroactive rate hikes, consumers with high credit scores may not be able to avoid unwanted adjustments or fees this coming year.
Some other points not to be overlooked are the rights of creditors to cut your credit limit. They may elect to do so for many reasons a few being your credit score has dropped, your card usage is low or simply because of a change in your payment behavior.
Sad to say, it no longer matters if you’ve been a good customer in the past. Your account could be closed at any time.
And let's not forget the shocking statistics showing how more and more mortgage delinquencies are directly related to credit card delinquencies and how this is all related to personal (non-mortgage) debt.
So, just because the St. Louis market has not been hit as hard as other real estate markets "and won't suffer the run down" says Jack Strauss, a St. Louis University economist, St. Louis home mortgage consumers need to be aware of 3 credit card moves that will put them in a better financial situation in 2010 as regards their high interest debts and mortgage.
1. Financial analysts in the credit industry suggest maintaining a good score by paying debts on time, keeping balances low and remembering not to close accounts unless it’s absolutely necessary to avoid excessive fees or changes in terms.
You may consider paying down holiday purchases which reduces your outstanding balance protecting you against negative changes to your account. This will inevitably save you money and most likely improve your credit score.
Until the Credit Card Accountability, Responsibility and Disclosure Act, or CARD Act, takes effect on February 22, 2010, you could be vulnerable to higher interest rates that apply to an existing balance. As mentioned above, having a lower balance could help cushion your credit score against credit limit reductions.
2. This may be the perfect time to speak with a trusted St. Louis mortgage lender to see your financial options on paper.
If you have been contemplating a refinancing, this could now help you in paying off high interest debts which not only saves you money but will assist you in lowering your balances to avoid loss of credit limits or being hit with a lower score.
By the way, this diminutive word "debt" is presently striking big fears not only in the hearts of American consumers but equally so in banks and credit card issuers especially as we enter 2010.
That's why a St. Louis mortgage broker will probably discuss with you a very important ratio in credit scoring formulas which includes the amount of credit you’ve used versus your limit and how this will play a vital role in remaining financially healthy.
The problem that may surface is if your credit limits are cut and your debt doesn’t decrease or get paid down, your score may drop at any given time.
This may be avoided by disciplined budgeting or with the help of a St. Louis refinancing loan. A professional in this area will be able to help you form an aggressive financial attack or banking offensive as I like to call it.
3. Now as we get ever closer to the institution of this new law, another word of advice would be to open all credit card mail you receive immediately and be absolutely sure to read it carefully.
The CARD Act requires credit card issuers to give you the right to opt out of a “significant” change in terms and must do so in writing.
That is why it is crucial to watch for any financial mail from your credit card company(s) since they are now required by law to send out notices at least 45 days in advance of the effective date.
That gives you a limited time to decide whether to reject the proposed change. Keep in mind that if you decide to opt out, this cancels the account.
But to leave you on a positive note, there is much you can do to vastly improve your credit score so as to not face these financial dilemmas.
By making a fervent effort to keep your credit card scores high, this should qualify you for most types of credit cards that have lower rates and worthwhile perks.
Not to sound redundant, but some proven tips to accomplish this would be to always pay your bills on time and reduce credit card balances whenever you can.
Above all else, try to avoid the most common yet disastrous path of ordering multiple credit cards at one time. As tempting as this may be, this will only lead to numerous inquiries on your credit report that can also lower your score.
Although there are many other financial strategies that we could discuss that would be advantageous to St. Louis home mortgage owners, these three important steps mentioned above will put you and your family in a better position to help get you through this brief economic setback.
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Article Added on Thursday, February 4, 2010
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