Protecting cardholders from Misleading Terms
Many of us receive countless junk mail for low interest rate credit card offers. The marketing for these offers have become more creative with multicolored envelopes or authentic looking mail. Zero Interest on all balance transfers or introductory rates on all new credit cards are very appealing. There's a popular saying: The Devil's in the Details. These teasers rates are just that....teasers. If you read the fine print, you'll see that the rates are only for a limited time. The fine print also has terms like "fixed rate" or "sub prime rate" but many know what that actually means. Many of the offers feature misleading and confusing terms. Credit card companies were hoping you skipped reading the fine print and signed up for a credit card anyway.
The new credit card bill sought to address these questionable practices by prohibiting credit card companies and banks from using terms such as "fixed rate" and "prime rate" in a misleading or deceptive manner by establishing single, set definitions of those terms. The bill also gives cardholders who get pre-approved for a card the right to reject that card up until the moment they activate it without having their credit adversely impacted.
Oddly enough, the new bill imposes a requirement that creditors have a minimum size font on their statements to improve readability of the terms for the credit card. No more "read the fine print" because no all the font is the same!
Hopefully you're working your way through your credit card debt and with more information, controlling your financial ship would be daunting. Tax time is about a week away and the next few posts will focus on preparing for paying the piper....or Uncle Sam.
As always, please email me with any questions or comments.
Ebong Eka, CPA
Many of us receive countless junk mail for low interest rate credit card offers. The marketing for these offers have become more creative with multicolored envelopes or authentic looking mail. Zero Interest on all balance transfers or introductory rates on all new credit cards are very appealing. There's a popular saying: The Devil's in the Details. These teasers rates are just that....teasers. If you read the fine print, you'll see that the rates are only for a limited time. The fine print also has terms like "fixed rate" or "sub prime rate" but many know what that actually means. Many of the offers feature misleading and confusing terms. Credit card companies were hoping you skipped reading the fine print and signed up for a credit card anyway.
The new credit card bill sought to address these questionable practices by prohibiting credit card companies and banks from using terms such as "fixed rate" and "prime rate" in a misleading or deceptive manner by establishing single, set definitions of those terms. The bill also gives cardholders who get pre-approved for a card the right to reject that card up until the moment they activate it without having their credit adversely impacted.
Oddly enough, the new bill imposes a requirement that creditors have a minimum size font on their statements to improve readability of the terms for the credit card. No more "read the fine print" because no all the font is the same!
Hopefully you're working your way through your credit card debt and with more information, controlling your financial ship would be daunting. Tax time is about a week away and the next few posts will focus on preparing for paying the piper....or Uncle Sam.
As always, please email me with any questions or comments.
Ebong Eka, CPA
