Credit cards are seen as a convenience for many consumers, allowing them to make purchases without their own spending money immediately. Using credit cards to pay for purchases can provide a safety net against scams and helps mitigate cash flow issues. Additionally, they can provide protection when prepaid purchases such as flights are canceled.
However, credit cards can also be financially risky. This is because it can be very easy for people to build up huge amounts of credit card debt without having the means to pay it back. This can lead to high-interest rates and a downward spiral of debt. There are regulations in place to prevent credit card companies from taking advantage of consumers in debt. If you are struggling with credit card debts, it is important to understand your rights.
Credit Card companies are subject to the CARD Act
The Credit Card Accountability, Responsibility and Disclosure Act of 2009 (CARD Act) was put in place to protect consumers in several ways. First, it means that credit card companies are now limited in the interest rates that they can charge. For example, credit card companies cannot apply APR interest rate increases to previous unpaid balances.
Additionally, credit card issuers must give advance notice of any change to the terms and conditions on a credit card. This means that you should never have any unexpected increase in interest rates, and if you do, you may be able to take action.
If you believe that a credit card company has subjected you to unfair interest rates, it is important to understand the law and take action if you think it is necessary.