Unit+4+-+Credit


 * __​Unit 4 - Credit__**



Should you cancel unused credit cards? media type="file" key="money147_cancel-credit-card.mp3" width="240" height="20"

How to raise your credit score by Money Girl Posted on Aug 5, 2009 media type="file" key="money135_raisecreditscore.mp3" width="240" height="20"

** What do you know about the new credit card laws? How will the new credit laws affect consumers? **
1.Retroactive Rate increases Retroactive rate increases is a new change to credit laws. This is telling us that companies can no longer increase rates, unless a promotional rate has expired, or you are sixty days late with a payment. If you are punished with with this late fee, it will not be a perminant rate. If you pay your bill for this company on time for six months you will recive your original rate back. With this new law the universal defaut rule is no longer in effect. Companies can't punish borrowers for late payments on any unrelated accounts.

2. Fee restrictions People with credit cards will not face late fees anymore if the banks don’t accept mailed payments on the due date because it won’t be considered late. The creditor and the cardholder have to both approve that the payment was truly late in order to receive late fees. The creditor also can only charge one over limit fee per billing cycle. Last, banks can’t charge people a fee for paying their credit card debt on the computer or over the phone.

3. Restricts card issuance to students A Certain part in the new law will not let people who are under the age of 21 and can’t prove that they have a job or some kind of income or provide a co-signer that is 21 or older will not be able to receive a credit card. The reason for this is to protect young people, mostly people in college, from digging themselves into a huge amount of debt. A study showed that 82% of students in college carry a balance every month. On average the balance was $3,173. I believe this a good step in stopping creditors from taking advantage of students who are not knowledgeable about credit. If you’re a student with a job you can get a credit card but at least you have a means to pay off your debt. There has been a worry about people going to paydays or pawnshops to get some money but you can’t go to a payday without having a job to pay the money back.

4.double-cycle billing One of the changes to the credit card laws is that the credit companies can no longer do double-cycle billing. This means that the issuer can’t charge interest on debt already paid off the previous month. How this affects consumers is that they won’t have to pay as much money because of interest.

5. More time to pay Previous law required 14 days notice before a payment was due. The new law, effective August 20, 2009 requires card companies to send out statements 21 days before a payment is due. This will be a possitive effect for consumers, in my opinion, because they will have more time to get organized, make sure they get a pay check inbetween receiving the letter and paying, therefore helping to make sure they have enough money to pay their bill.

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Resources:
What the new credit card law means to you. New credit card laws take effect, but higher rates plague consumers 8 major benefits of the new credit card law New Credit Card Law: What It Means For You? Money Girl Podcast

=**What is the difference between a credit card and a debit card?**=

Resources:
Credit or Debit? It's Becoming Harder To Tell the Difference Debit or Credit? Here's the answer. Debit vs. Credit: Which is Better? Debit card or credit card? Here are the pros and cons