Credit Cards have changed. For the better.
Guess what? Credit cards are not all evil, and some fairly huge changes that have come in this year, make the world of credit a safer place for us all to belong. Woo. So what are these changes? Well…
The most expensive debt will now be paid off first, not last
In a huge Hah! to all those nasty and mean credit card companies who always used to use your repayments to pay off your cheapest debt first, now the dearest debt must be serviced first. No more paying extra interest on the more expensive debt, such as cash withdrawals, over a longer period of time, therefore paying more.
For new accounts, making the minimum payment will always reduce the outstanding balance.
For new accounts opened from April 1 2011, credit card companies must set the minimum payment at a rate that reduces your actual balance by 1% each month. Before, if you made the minimum payment, this would generally only cover fees and interest charges and wouldn’t reduce your outstanding balance. This will mean higher minimum payments, but reduce the total amount payable, so we think this is A Good Thing.
More flexibility about how much you pay towards your bill.
Oftentimes, if you wanted to set up a regular payment you would normally have had to pay either the outstanding balance, or the minimum payment each month. A crafty way for card companis to keep you languishing in minimum payment hell forever. Now you must be given the choice to repay any amount you want between the minimum and the full balance.
No surprise credit limit increases
Before, your credit card company could increase your credit limit without asking you. And we all know how tempting temptation is. Now, they have to contact you if they want to increase your credit limit and you have 30 days to decide whether to decline the increase.
Credit card cheques will only be sent on request
You remember all those credit card cheques you used to get sent willy nilly? Well now, credit card companies can only send you these cheques if you ask for them. Better find something else to use as loo roll then.