If you’ve ever applied for a new credit card, you must have faced lot of scams through the mumbo-jumbo agreement. Consumers regularly receive credit card offers in the mail boxes and while most of the offers are directly into the paper-shredder, there are some others who pay attention to the bold prints of the card. Though the fine print is perhaps the most important part of the credit card agreement, there are very few who invest their time to go through the fine print and educate themselves on terms and conditions of the credit cards. Being subject to high interest rates is the fact that makes the debtors hurt their credit scores as they can’t keep up with their monthly payments.
While most people think that reading the entire credit card agreement is the most strenuous task, everyone wants a change as far as the agreements are concerned. After hearing the number of complaints of the credit card holders, the Consumer Finance Protection Bureau (CFPB) has recently releases something called the “shorter and simpler credit card agreement” and this has been launched as part of the Bureau’s “Know Before You Owe” campaign and the main aim of this is to help the consumers better comprehend their credit card agreement. It was on December, 7, 2011 that the CFPB released this two-page draft that is called the ‘Prototype’ credit card agreement campaign. According to the CFPB, simplifying the credit card agreement is priority. Though the CFPB officials have met a number of times with the consumer groups and the industry representatives to create this agreement, it had never brought into effect before the 7th of December, 2011.
The intention of the agreement is to make the credit card holders understand the terms of the credit card, the terms, the prices and the risks. Even the consumers can find it easier to comparison shop before settling on a particular credit card. The agreement even raises Truth in Lending compliance issues and the potential exposure issues for the issuers in private litigation. The basics of the credit card agreement are as follows:
• Changes: The changes section offers the consumer with the generic set of possible changes that the credit card issuer can make and some limitations that can be applicable to such changes.
• The costs: The cost section of the credit card agreement includes information about the specific fees and the interest rates associated with the account, and this will also include the activity fees, replacement card fees and others. The information on the timing of payments and the consequences of paying late and how the interest rates may vary due to such credit card misuse.
• Additional information: The rights of the credit card issuer like the right to collect the attorney fees, the right to dispute charges and the cardholder’s rights will all be mentioned here.
Soon as the credit card agreement came into effect, the CFFB did not require all the credit card issuers and the banks to adopt this but at least a local credit union needs to adopt the agreement in January, 2012, in fact Pentagon Federal Credit Union has already announced the plan to use the agreement in 2012 to encourage more people to educate themselves on the agreements of the credit cards before signing the papers.