Bracing for new credit card rules

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PHOENIX - Iliana Vilaire knew this was coming but when she opened her credit card bill and actually saw it in black and white – the shock set in.

“I could probably get a better deal from a loan shark,” she tells 3 On Your Side.
A substitute teacher who makes about $20,000 a year, Iliana carries a $4,000 balance on her credit card. Every month she tries to chip away at that by paying more than the minimum payment; but things just got much more difficult.

That means her monthly finance charge went from $48.62 to $81.91.
What should she do?
“The same thing all consumers should do when faced with that dilemma,” says Mike Sullivan, Director of Education for Take Charge America, “Go somewhere else and ask if they can give you credit cards with better terms.”
Sullivan says right now consumers need to pay close attention to the fine print; your rates and charges might be increasing as we speak because the new credit card rules, as outlined by the Federal Reserve, will make it more difficult for companies to do this after February 22nd. Sullivan urges people to look at every correspondence.
Consider this, according to CNN, last year Americans spent more on over the limit fees than on fresh fruit. A lot of people simply don’t pay close enough attention to their credit cards, and, in the end, they pay.
The new rules force credit card companies to be more transparent and give you 45 days notice before raising your rates or tacking on fees. Sullivan says right now they are scrambling to find ways to boost their bottom line. “I think the law is going to have a positive impact on consumers, but it’s going to be a lot like going on a diet … very painful until we are all healthier.”
For substitute teacher Iliana Vilaire, it’s not only painful, she says it’s infuriating: Especially when she reads news about big banks, like Chase making record profits.
Like a lot of consumers, she's left feeling that the buck is being passed on to the ones who least can afford it.
More information from Take Charge America – here’s what consumers need to be aware of:
     1. Higher APRs on most cards by February 22
     2. More variable rate cards after February 22
     3. More cards with annual fees
     4. More people unable to obtain cards on good terms
     5. People under age 21 will find it difficult to obtain credit
Sullivan adds:
-Most if not all increases have happened by now.
-The only thing to do for the next 2 weeks is read all correspondence carefully and understand the changes, such as no automatic approval of over limit charges. After the 22nd these will be denied unless permission has been given to approve them.
-The changes will benefit customers who are responsible users, and even many who have temporary problems like an occasional late payment.

Click here for more information from the Federal Reserve on the new credit card rules.