This new world we live in: credit cards
So, the recession is supposedly ending. The Dow is recovering (or at least out of ICU). A few homes are finally selling. But I think we all know that whatever financial”truths” we knew a few years ago may now be lies. Unfortunately, we don’t yet know what the new “truth” is.
While I wouldn’t dream of offering any complex financial advice, I will say that going forward watch your credit cards! The new laws have gone into effect, and we are slowly discovering how that will impact us.
The old advice about paying off your credit cards every month may soon result in an annual fee. This may not apply to all cards, but some credit companies may now assess fees on customers with good credit habits. Or maybe you will be assessed a fee if you don’t use that card enough that year (based on whatever dollar amount “enough” means).
Transferring balances from high rates to low rates often results in a “transfer fee‚” but that it could even impact your credit score. So Thriftistas beware!
In the end, there may only be one universal truth. DO NOT MISS A PAYMENT. Set up auto-pay‚ at least for your minimum balance due‚ so you aren’t assessed a fee and take a hit on your credit score. I also know someone whose credit card interest rate recently hit 29% and she has good credit. She had one or two late payments in about 10 years, but since one of those late payments was this year, she now has to live with this interest rate for a while.
Now I just have to wait and see if cancelling long-term cards will still negatively impact my credit score. If that rule changes, then maybe I can get rid of one of my old credit cards that I only keep in order to maintain a good score! If it does, then maybe we will have a little more negotiating power again. In March 2010, I called two of my credit card companies to ask if they would lower my interest rates; one lowered the rate (still not low enough to consider carrying a balance) and the other said there were no lower interest rates available (bull!). Neither would commit to lower interest rates on the phone– I put in the requests and had to wait until they were “reviewed”.
Now we just have to wait and see what other new changes this economy and the new credit card laws will bring us. But until then, avoid those late fees and high interest rates.
