Credit Card Debt
Credit card debts pose to be a big problem if they are not managed judiciously. Financial experts are of the opinion that the credit card industry may be facing a fate similar to the real estate industry in United States if existing norms pertaining to the credit card industry are not altered.

 The credit card industry in U.S. is ready to undergo certain reforms that are supposed to come into force not before July 1st 2010. These reforms have been introduced to give financial solace to the innumerable credit card debtors who are trying hard to offload their credit card debt burden.

 The main aim of the credit card reforms is to give more time to the credit cardholders to pay off their existing credit card debts. The main highlights of the credit card reforms are given below.
  Increase in interest rates
Hike in interest rates on existing balances is possible only under certain conditions. The issuer has to give a notice 45 days prior to the changes in the interest rates. And there can be no changes in the first year.

Transparent due dates

Creditors cannot set due dates on which they do not accept payments. If the due date is set on a weekend or on a holiday and a creditor doesn’t accept payments on those days, the payment received on the following day cannot be treated as late payment.

More time to make payments

The cardholder has to be given a reasonable time to make payments. A payment will be regarded as due 21 days after the bills get delivered.

Credit cards with higher interest rates to be paid first

 If a cardholder is having multiple credit card accounts, and if he pays more than the minimum amount, the amount that is in excess goes towards making payment for the credit card with the highest rate of interest.

Double cycling bills will cease to exist

Charges on outstanding balances of credit cards will be calculated on the basis of purchases that have been made in the current cycle rather than calculating it from the previous billing cycle in order to calculate the interest rates.

It is interesting to note that total outstanding debt in United States shrank by USD$7.5 billion. This implies that the annual percentage drop is 3.5% as of February 2009. However, it doesn’t include debts that are backed by the real estate industry.

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