Should You Remain An Authorized User After Divorce?

It’s common for couples to share credit card accounts, with one spouse opening the account and adding the other as an authorized user. This is especially useful when one spouse has a good credit history, and the other needs to build their credit.

But things get tricky when marriages go bad. For one thing, if you’re still an authorized user on your ex’s credit card, their spending habits can harm your credit score. For another, keeping you as an authorized user is a good way for your ex to see what you’re spending money on.

So what should you do? Experts recommend calling the credit card companies and asking to be removed as an authorized user. Remember, you’re responsible for at least half of the debt incurred on your credit cards during the marriage. If you stay on the accounts following your divorce, you can also be held liable for half of the debt incurred after the marriage ended.

If you’re receiving alimony or child support in the form of credit card privileges, it might be a better idea to set up automatic deposits or old-fashioned checks instead. If your ex defaults on the credit cards, your support - and your credit score - will suffer.

Some New Credit Card Rules Go Live Today

Most of us have heard grumbling about the long delay before the new credit card rules go into place. Most of the changes won’t occur until mid-2010, but there are some important rules that will go into effect sooner. They are:

#1: 45 Days Written Notice of Change to Terms

Any significant changes to the terms of the account must be detailed in writing 45 days before the changes take place. This also goes for interest rate hikes. This gives card holders a reasonable amount of time to opt out of changes they don’t like. Prior to this change, creditors were only required to give 15 days notice.

#2: Written Notice of the Right to Cancel

Along with the written notice of changes to interest rates and terms, card issuers must provide cardholders with written notice of their right to close their account instead of agreeing to the new terms.

#3: Fair Due Dates (in February)

Credit card bills will be due on the same day every month to make it easier for cardholders to pay their bills on time. If the due date falls on a weekend or holiday, the payment cannot be marked as late if it’s received the next business day.

For the full set of rules that will go into effect by 2010, visit www.consumer-action.org and search for “new credit card provisions”.

Soon You’ll Understand Your Credit Card Statement

Part of the new credit card rules to take place officially on July 1, 2010, include credit card statements that are less confusing and easier to read. Consumers have been complaining for years that the phrases used on their statements make it next to impossible to understand the information the statement contains and is therefore very misleading. In addition to the way content is worded, consumers have complained that critical information doesn’t appear on the statements every single month.

Improvements to the credit cards statement will include:

Key Changes in the Card Terms - Any changes must show up in the table shown at the top of every credit card statement. This table includes the interest rate, total balance owed, last month’s balance, current balance and amount of last payment. It will now show any changes including the increase of your interest rate and the date it will be effective.

Detailed Transactions- Details about each transaction that took place during the billing cycle, including a reference code, transaction date, post date, description of transaction, and amount charged for each purchase, will now appear on each monthly credit card statement.

Fees - All fees incurred during the billing cycle and how they were calculated will be included.

Interest Charges – A detailed listing of all of the interest charges during the billing cycle will be included.

Totals Year To Date- Created to show consumers how much they have spent throughout the year on fees and interest rates and must be included on all credit card monthly statements, new to the credit card changes in July 2010.

Make sure to review your credit card statements every month to watch for any changes or potential problems. The earlier you spot them, the easier they are to correct or improve.

Credit Card Changes Passed - Start in 2010

Well, I guess the saying is “good things come to those who wait”, and apparently consumers can expect good things regarding new legislation in the credit card industry in the year 2010.

After more than 60,000 people wrote into the feds demanding changes,  the biggest changes to hit the credit card industry were put in motion and will take effect in July 2010.   Some of the changes include:

• blocking card companies from applying higher interest rates on existing balances.
• Late fees could not be charged without giving consumers at least 21 days to make a payment.
• Banning of two-cycle billing
• Any payment consumers make beyond the minimum must be applied to the balance with the highest interest rate or spread proportionally to all balances.

While these changes are good news for existing cardholders and will prevent the mysterious charges that sometimes occur on existing credit card statements, it will actually serve to raise the rates most new credit cardholders receive when applying for new credit.  Consumers will probably not notice as many 0% offers in their mailboxes because the credit card industry won’t be able to afford to offer the lower rates (since it can’t increase rates on existing customers!)

According to a study  by law firm Morrison & Foerster, these new changes in the credit card industry may reduce the credit card industry revenues by $12 billion per year.

Should Congress Lower Credit Card Fees Paid to Retailers?

Congress is hard at work trying to find a way to restructure the way credit cards operate. They may have good intentions, but keep your eyes open, because they may actually cause more harm than good.

We all know the government is bailing out big-time banks and now, perhaps, the auto makers. Jumping on the bandwagon, some representatives from the retail industry came up with a great idea. Why not lower the disease that retailers pay to credit card companies when people buy merchandise on credit? The theory as this savings would be passed on to the consumer. Think again.

The fee for using a credit card is usually less than 2%. It provides for the electronic network that allows major credit cards to be accepted. Retailers get their share of the pie right off the bat, while the credit card company takes the risk if the customer doesn’t pay the bill. However, small merchants are struggling and some members of Congress feel that reducing the fees will help the average consumer.

Keep an eye on the Conyers-Cannon bill (HR 5546). This bill would waive antitrust regulations for as many as 15 million retail companies and allow them to force banks and credit card companies to provide basically free credit. The Justice Department doesn’t like the idea, because they believe antitrust laws make sure that markets are fair and competitive and protect consumers. That won’t stop Congress, however, because some members are espousing a theory that by reducing expenses for retailers, it will ultimately lower prices for consumers.

It won’t work. Why? The authors of the bill did not include amendments that that would make sure the savings are passed on to consumers. Instead, it would only increase the earnings of the huge corporations, while all the little guys would once again be left out in the cold.

If Conyers Cannon becomes law, credit card companies will lose profit, in turn, they will as restrict credit even more smaller providers might even drop out of the market altogether. And it will leave merchants in struggling communities unable to offer credit cards to their customers. Once again, only the big guys will win credit card companies will most likely recoup their losses simply by raising interest rates on cardholders even higher than they already have

The last thing anyone can afford is Congress to continue to try and solve the economic crisis by bailing out the rich and ignoring the poor.