Rebuild your credit with secured credit cards

Credit card companies looking to reduce their risk are many ways to go about it, and they will be using all of them between now and February 20, when the new laws come into force.

Some consumers are affected by lowered credit lines – sometimes lower than their outstanding balances. This triggers overlimit and causes panic in consumers who are unable to pay the balance under the new credit limit.

Others see arbitrary interest rate hikes – which not only makes it much harder to pay off a balance, but causes their minimum payment increase. This can trigger panic again, because many consumers were hardly able to make the current minimum.

A third set of consumers, who have contracts with credit card companies that lock a rate until the balance is paid, see their minimum payments increase. Again – panic. A gentleman who wrote bankrate.com says his minimum was 2% and there was the feeling proud of himself to pay more each month – $ 600. Now, the new minimum is 5%, which is $ 1200. He can not manage an extra $ 600 per month.

Some credit counselors say consumers should call their credit card companies and try to negotiate. Apparently some have been successful with this and others do not. It depends on your attitude when you call, the person who answers the phone, or your payment history?

We do not know, but it is worth trying.

Most credit card issuers allow consumers to opt-out of an increase in interest rates by closing the account and continue to pay their former rate. This will, of course, subsequently result in damage to the consumer’s credit rating. This could result in immediate damage if the card issuer reports the available credit than the amount owed. If they continue to report the original credit line and the current amount due, credit score success will not come until the last payment is made and the account is closed.

But what can you do if you suddenly minimum 2 1/2 times what you had been paying, and you do not have additional funds? If talking will not help, the only alternative is to seek funds elsewhere and pay the account.

In today’s economy, the best course of action is to repay the debt as quickly as possible and re-work your budget, so no more short-term credit needs.

Rebuild your credit with secured credit cards, Protect your credit with premium credit monitoring and get your free credit report.

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