How Changes in Credit Benefit Your Business

Every company seems to have at least one credit card these days. Even if the credit card is not allowed to be used at this time, it is there. During the lean times companies will use the credit card more often to get the daily things they need for the business. Seeing as there has been a lot of lean times recently, many businesses are staring down the barrel of sizable credit card debt and they are not alone.

The fact there are so many people and businesses in credit card debt is the reason for the passage of the Credit Card Accountability, Responsibility and Disclosure Act which took effect on August 22, 2010. Lovingly called the Credit Card Act, the purpose of the Act was to give individuals and businesses some breathing room when dealing with a debt of this nature. The fact there is more credit card debt in the nation than any other kind of debt has led many companies to invest in purchasing debt leads.

Before taking the plunge in debt consolidation, it is important to see some of the things which are being offered to you through the new Act which has recently been passed. You may just find there is a way you can pay off your debt directly to the credit card without having to worry about any kinds of penalties. The many different provisions available in the new act make it possible to save money in ways which was never before possible.

Late fees no longer carry such a stiff penalty. In fact, the law includes a provision in which the credit card company can only charge you up to a $35 fee if your payment is late. The late fee is the highest fee they are allowed to charge. All other fees are limited to $25. While it is not recommended to make payments late, it is good to know if anything happens, you will not be penalized greatly for having the payment in a little late.

Caps on the amount a credit card can charge for interest rates also helps in making it easier to make the payments. Because of the ceiling being over 20% APR, most companies will start you out with that rate and drop you down as you prove your ability to act responsibly. Even if you are late with a payment or skip a payment altogether, they cannot increase your rate more than what the law allows. Because the amount they can raise the interest rate is so low, this is the reason why the intro rate is so high.

If your interest rate is increased, there is a 45 days period in which they will have to evaluate your account. If the raise in APR is unjustified, it will return to the original rate. It protects the consumer from having rates jacked up on them for no good reason. It also gives you some breathing room to be able to pay off your debts faster.