Ten wise ways to make credit cards work for you, plus the new legislation.
In this show, I’ll offer ten ways to use credit cards wisely and share some thoughts on the upcoming credit card legislation.
Credit Card Caution
If you listened to last week’s show, Five Financial Tips for New Graduates, you know that one of my tips was to be very cautious with the use of credit cards. That’s because of all the ways people can get themselves into financial trouble, credit cards tend to be the most common accessory to the crime. On the surface, credit cards seem so flimsy and innocent. Who could imagine their ability to body slam your financial well-being when you least expect it?
Credit Card Defense
Not only have credit cards been incredibly easy to get, but their unpaid balances are one of the most expensive types of debt to have. And, of course, we all know how easy they are to use! That’s a triple whammy that can really work against anyone who lets down their financial guard, even for one shopping trip. But despite all the potential harm that credit cards can inflict, they have a beneficial side, too. So I wanted to follow up this week with tips about how to use them wisely and to give you a bit of information regarding recent legislation. The law is called the Credit Card Accountability, Responsibility, and Disclosure Act (or Credit CARD Act) of 2009.
More Accountability and Responsibility
The new credit card regulations will be gradually phased-in, with the earliest starting in August of this year. They’re intended to protect consumers from various fees and surprise interest rate hikes on their existing balances, among other sweeping changes. The banking industry opposes the legislation because they fear it will make them less profitable. Many predict that you can expect to say “bu-bye” to a lot of the lucrative benefits—like reward points and cash-back bonuses—that responsible card users have been enjoying. And it’s been suggested that the new rules may result in a tighter credit marketplace where it’s more difficult to even get a credit card, especially one with low-interest or no annual fees. I’ll put a link to the key provisions of credit card reform in the show transcript at moneygirl.quickanddirtytips.com.
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About the Author
Laura Adams received an MBA from the University of Florida. She's an award-winning personal finance author, speaker, and consumer advocate who is a frequent, trusted source for the national media. Money-Smart Solopreneur: A Personal Finance System for Freelancers, Entrepreneurs, and Side-Hustlers is her newest title. Laura's previous book, Debt-Free Blueprint: How to Get Out of Debt and Build a Financial Life You Love, was an Amazon #1 New Release. Do you have a money question? Call the Money Girl listener line at 302-364-0308. Your question could be featured on the show.
