Bank of America was the first company to agree to the rate freeze and Discover just recently agreed to do the same. However, not all companies are jumping on board. Several companies have been rushing in before the new consumer law goes into effect. Those companies that are not in agreement with the freeze cite the changes are due to the economic climate and are only interested in getting back the money owed to them. Consumers with good credit and no record of a missed payment on their account have reported that their monthly payment amount has doubled. The credit card company Chase changed the minimum payment amount for more than one million cardholders as recently as the month of August, seeking more money being paid toward the owed principal. These changes in the industry have made many credit cards unaffordable to consumer and have resulted in a number of bankruptcies. Chase does not have any plans to put a rate freeze into effect before the new law changes. Other banks, like Wells Fargo, also plan to hike the interest rate on credit cards.

Many critics say that credit card companies are out to get as much money as possible before the new law makes it too difficult to make changes. However, those in the industry contend that missed payments and spending over the credit limit by consumers have left them in a bind. There is also concern that if Congress should vote to move the date for the new law to go into effect in December of this year instead of February, there would not be sufficient time to update computers and be sure they are in compliance with the new laws.

Lawmakers have asked the Federal Reserve to start collecting information on current credit card practices so they could effectively monitor the changes after the new law takes place and be sure all are in compliance. Basic information such as credit card terms, the actual cost of credit for the consumer, and how much credit is available has never before been collected in a systematic way.

Consumers who have a credit card outside of Discover and Bank of America are encouraged to stay on top of their monthly statements and continue to analyze them for any changes that are being made. Budgeting for a higher credit card payment may be a good idea even if an increase does not go into effect in order to pay the card off faster. Even consumers who have an excellent credit and payment history with a card company may be subjected to rate hikes, penalties, and doubled monthly minimum payments.

Credit Card Companies Hiking Rates Before 2010 Changes was created by and is property of American Consumer News.

Reductions In Credit Limits- Many consumers are under the false impression that credit limits are set in stone or that they have to be notified in advance if that limit is changed. Unfortunately until the new changes go into effect in 2010 your credit limit may be reduced regardless of your payment history and with no advance notice. It is important to pay attention to your balance in relation to your credit limit as a sharp reduction could put you in danger of going over your credit limit which may result in over the limit fees tacked onto your bill.

Use It or Lose It- On the opposite end of the credit limit spectrum, there are account holders that have little or no activity on their credit card accounts. This lack of usage can backfire as many credit card issuers are closing accounts with little or no activity. You may ask, “why difference does it make if I’m not using the card anyway?”, the damage will be reflected in your credit score as your debt to credit ratio increases. If you have a card and don’t use it regularly consider making small affordable purchases which you can pay off each month.

Think Twice Before Negotiating Lower Rates- Until recently the standard strategy to lower your interest rate was simply contacting the credit card issuer and negotiating a lower rate. This may no longer be the best course of action unless you are struggling to make your minimum payment each month. The reason for the change in tactics it due to the fact that requesting a lower interest rate constitutes an application for credit which may trigger unwanted scrutiny in other areas of your finances. Your credit score, job position and salary may be reviewed which could lead to adverse changes to your account.

Increased Minimum Payments- If you are experiencing a financial hardship and are struggling to make the minimum payment on your credit card you should know that many consumers are reporting an increase in the minimum amount due each month. When you combine a higher minimum payment with increased interest rates and lower credit limits many people will simply not be able to stay ahead of the game.

If you find yourself having difficulty maintaining your payments you should be proactive and contact the credit card company. They may have solutions that could help you make it through these tough times with minimal damage to your credit history. By making the effort to contact them and discuss your circumstances you show that you are making an attempt to rectify the situation which will be viewed in a better light than avoiding the problem completely.

Be On The Lookout For Changes In The Credit Card World was created by and is property of American Consumer News.