The new credit card rules were a big win for consumers this year. But the rules don't go into effect until February 2010. In the meantime, credit card companies (and one credit bureau) made moves that made credit a lot more expensive for cardholders. Here are the worst credit industry changes of this year.
Chase customers got the shock of the year when they learned their minimum payment more than doubled. Worse, the change targeted customers who'd been wooed with a lifetime low interest rate balance transfer deal. Some cardholders managed to keep their lower minimum payment by converting their credit card balance to a five year, fixed-rate loan.
2. Bank of America, Wells Fargo Raise Interest Rates
Bank of America and Wells Fargo are just two banks that announced interest rate increases this year. Other credit card issuers increased interest rates and converted rates from fixed to variable rate, which allows rates to increase when the Federal interest rate increases.Experian and FICO have been in a fight about credit scores for a few years. Unfortunately, consumers were affected by the tiff when Experian decided to stop allowing FICO to sell credit scores based on consumers Experian credit report data through myFICO.com. Now, we can only purchase FICO scores based on Equifax and TransUnion credit report information. Lenders continue to be able to access and use Experian-based FICO score.
If you're trying to avoid more credit card debt by keeping your credit card in your wallet, you might lose it. Credit card companies have been closing unused credit cards, perhaps to free up more debt on their books. Unfortunately, a closed credit card can hurt your credit score, especially if you have high balances on all your other credit cards.
While other credit card issuers were closing dormant credit cards, Cincinnati-based Fifth Third bank decided to make money off cardholders who haven't used their cards for more than 12 months. The fee is a nuisance, but what's worse is the potential damage. If you haven't been using your credit card, you might not monitor your credit card statement. You could miss the fee and end up with a late charge, higher interest rate, and blemished credit score.
This is what happens when the federal government fails to put a cap on credit card interest rates. Credit card companies charge whatever interest rate they want. A credit-hungry consumer who's having trouble getting a credit card might sign up for this card and pay this astronomical interest rate, or go bankrupt trying.
After Experian pulled FICO scores, it turned to LifeLock, the identity theft prevention company. Now LifeLock can no longer send
fraud alerts to Experian on your behalf. It can continue adding fraud alerts to your Equifax and TransUnion credit reports. If you want a fraud alert on your Experian credit report you have to manually add one. Fortunately, that process is free.
