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Among the rules that took effect Monday, new interest rates can only apply to new charges, and a fixed rate cannot be increased during the first year of an account unless the customer is more than two months late in payments. Bills must explain how long is needed to pay off the debt if only the minimum payment is made, and what the total cost would be. Also, the credit card's due date must stay the same, and you'll have until the next business day if that due date falls on a weekend or a holiday. An applicant younger than 21 must prove he or she can make payments or have a cosigner on the account. All of which represents marvelous new control for credit card users. Now for the bad news, though. That $10 billion a year consumers were losing every year to rip-offs by credit card companies? How do you suppose companies will make up for the loss of those ill-gotten gains? That's right, through tactics that are more honorable and transparent -- and that's why interest rates have been going up for credit card users, even those who have meticulously followed the rules. New fees also are being imposed, albeit more clearly explained to consumers now. Credit card companies use tactics to lure even jobless college students. Charging ridiculous amounts of interest and hidden fees to these students. An article from NYU Live wire , written by Ambrose Chan tells the story: Statistics show that college students in the United States are increasingly suffering from credit debt. According to Nellie Mae, a corporation dedicated in providing student loan programs, the average credit card debt among undergraduate students has increased by nearly $1,000 during the past two years. We all remember the first day of school. We’re equipped with new pens, notebooks and maybe even a shiny new piece of plastic to start off the four-year undergraduate study away from parents. But is it really that wise to provide a student with that much responsibility all at once? Credit card companies think so. Taking a stroll around campus during orientation, one couldn’t miss the colorful balloons strung to tables where companies offered free Frisbees and footballs for signing up for a $1,000 credit limit. Even with student loans and being jobless, students are surprisingly a good credit risk. As tomorrow’s newly employed workers, their future earnings potential is enormous, making them a target market. Research has shown that students are profitable customers that tend to stay loyal with their first card, spending plenty for the years to follow. |
