Despite CARD Act, consumers must take steps to avoid credit debt

The Credit Card Accountability, Responsibility and Disclosure Act has given consumers more protection against credit card issuers and an incentive to start borrowing again. While companies can no longer spike interest rates and fees on members, Reuters says that there are still a few things consumers should keep in mind to avoid any pitfalls in the terms and conditions of their memberships.

While the CARD Act has put a limit on the number of penalty fees credit card companies can issue, there is little regulation over how much these fees can total at one time. Overdraft fees have been capped under the new legislation as well, but companies can override the limit if an offender has been late on a number of payments within a six-month span.

Reuters notes that issuers are already raising interest rates to cope with the limitations and lost revenue due to the new laws. However, consumers can easily avoid the consequences of these credit card company tactics by staying on top of their monthly payments and reducing their debt when possible.

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