Credit Card Debt Essentials

Credit Cards, Part 5:
Things to Know and Your Responsibilities

Now that we’ve shown you how to choose the right credit card and how to pay off credit card debts more efficiently, the final piece of the credit card puzzle comes in knowing your rights and responsibilities as a consumer. Consumer law can be complex and confusing, but not knowing your rights puts you at a disadvantage when you deal with credit card companies and (if you get into trouble) collection agents.

If you’re having problems with credit card debt and you need to get a better understanding of your rights to deal with creditors and collectors, we’re here to help. Consolidated Credit has trained credit counsellors who can help you understand how to move forward and make a plan to get your finances under control. Call 1-800-656-3920 to speak with a counsellor today for a free debt consultation or get started online with a Free Debt Analysis.

Things to Know: Changes to Terms and Conditions without Notice

One of the big problems consumers have with credit cards is the terms and conditions may change. While major changes to the terms and conditions require 30 days notice before the change goes into effect, some do not even require that amount of time. The following changes outline what a credit card company must inform you of 30 days prior to the change taking affect:

1. a change in your credit limit;
2. an extension of your grace period;
3. a decrease in any charge, not related to a change in interest rate;
4. a change to any optional service on that account;
5. a change in your interest rate as a result of a change in the reference rate.

That last point can be confusing. This doesn’t mean a credit card company calls you to tell you penalty APR has been applied to your account because you were late with a payment. Instead, they have to tell you if your penalty APR rate changes because the reference rate used to calculate it changes. Often, people are surprised when they look at their bill and see a different APR even though the company didn’t tell them a new rate would be applied. If variable rates are listed in your credit card contract, it’s your responsibility to know when and how those rates apply to your account.

Your Rights as a Credit Card Holder

You aren’t completely unprotected when it comes to the world of credit. Knowing your rights as a consumer is important to ensuring credit card companies and collectors deal with your fairly and according to the law. Creditors and collectors are prevented from taking a number of actions and using unethical measures in dealing with you on collecting your debt. Most of these rights are outlined by the Collection Agencies Act.

In addition, you may have certain rights according to the laws of your province or territory. You can find more information for your province by visiting www.consumerinformation.ca.