Q: I’ve sort of been following the new credit card laws in the news and I know that the bulk of the CARD regulations are already in place. My question is this: How do they help and how can I get the most of the new credit card rules? - Pat Durkin, Chicago
A: Your timing is good. July marks the final implementation of all of the new Credit Card Accountability Responsibility and Disclosure Act regulations.
Overall, there are some good protections and some helpful ways to take advantage of the new rules. That said, there are also some pitfalls to consider.
"The new credit card rules can help consumers avoid debt or repay debt faster," explains Kevin Gallegos, vice president of San Mateo, Calif.-based Freedom Debt Relief. "These laws benefit consumers by requiring credit card banks to provide consistent due dates for bills, charge fair fees and clearly explain how long repayment will take. But no law can protect consumers from themselves when people make poor decisions and fall too deeply into debt."
Gallegos points to a recent Federal Reserve survey that says 46% of U.S. families carry credit card debt, with revolving debt totaling $838 billion by April 2010. That’s about $17,000 per U.S. household.
Freedom Debt relief advises card consumers not to spend more than 15% of their after-tax income on servicing overall debt. But the company says that it’s seeing more and more customers with debt loads higher than that, making it all the more difficult to pay off credit card debt — or even make a minimum payment.