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There has been a recent move to force credit card companies to review and rewrite some of their more controversial practices. Right now, consumers are complaining that they are at the mercy of the industry’s whims. Interest rates change frequently and, sometimes, without any good reason. The companies argue that their own circumstances – with rates of default and delinquency the highest they’ve been in years – build such practices essential. But customers and their advocates aren’t buying it. The credit card industry takes in billions of dollars each year, critics say, and can afford to treat their customers better.
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Some of the practices under review include: universal default, too-short customer notice of changes to terms and conditions, and the retroactive application of new interest rates to a customer’s entire existing balance.
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Universal default occurs when a customer’s credit score is lowered and their credit card company raises their interest rate as a outcome. There are many problems with that practice. For one, it’s too easy to implement. whether a customer makes a late car payment, their credit card interest rate could suffer as a outcome. And higher interest rates manufacture credit card payments higher, increasing the likelihood that the customer will default with many lenders instead of just the original one.
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Credit card companies are additionally being asked to give more notice to customers when their rates are about to change. Right now, companies are only mandatory to give a fourteen day notice by mail. Customers argue that, by the duration they receive the mailed notices – whether they receive them at all – they only have a few days to decide how to deal with the changes. whether the new bill is passed,

that notice period will be increased to nearly a month. Companies will plus be due to send out bills 25 days in advance of their due dates, compared to the two-week cycle now in place.
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The new bill could plus change the way card companies handle punitive interest rates. Some companies will take the higher rate and retroactively apply it to the full amount of the customer’s balance. Customers feel that that is unfair; whether they have been paying in a timely manner for years, why should they have high interest applied even to the debt that has been meticulously paid month after month? Companies are being asked to apply such rates only to the portion of the balance that caused the increase.
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Credit card companies aren’t happy with the proposed changes. They are facing difficult times, they say, and rules and regulations forcing them to change their practices will only hurt their ability to offer credit to a large number of customers. They maintain that the credit card industry is competitive already, and that customers have no need of legislation to protect them from creditors.
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Whichever stance you take, it’s possible that the credit card industry will be making a major overhaul in their business practices. In addition to the bill proposed last month by the House Financial Services Committee, the House Judiciary Committee wants merchants to be able to negotiate the amount they have to pay for credit card transaction fees. Despite card companies’ protests, change is on the horizon.
<p><br><br>that editorial has been provided by Creditor Web. At CreditorWeb.com you can compare by 100 credit cards from multiple banks and apply for <a href="http://www.creditorweb.com/">credit cards</a> online.

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