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Credit Card Shock

Posted by attorney Paul Meissner

Almost everyone carries and uses credit cards. Some folks have a bundle of cards, not because they asked for them, but in response to a flood of unsolicited offers over the past several years.

We are accustomed to receiving offers and information regarding credit cards. Most of the correspondence includes a small print-multi page document titled “Terms and Conditions". Until about September of last year, these documents were relatively benign, and routinely ignored. Since September 2009, almost every card issuer has changed the terms and conditions of card usage in very substantial ways. Interest rates, annual fees, and other fees have been increased almost beyond belief. Because of changes in Federal Law, you received these notices, and were given the right to opt out of the card (canceling), and pay off any remaining balance over time at old interest rates.

Most people didn’t read the notices, or, if they read, did not opt out. The result, is that finance charges will increase and escalate in 2010 in accordance with the new rates and fees. Carefully examine your credit card statements over the next several months, and pay particular attention to finance charges. Many people will find it difficult to pay off balances, and will only be able to pay interest. We all need to pay attention to the fine print of our card agreements, and explore ways to avoid interest rates that often exceed 20%.

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