New Law Prompts Close Look at Your Credit Cards

Recent legislation called the Credit Card Accountability Responsibility and Disclosure Act (CARD Act) brings good news for cardholders. It prohibits some abusive, deceptive lending practices that big banks and national card issuers had been using and requires financial institutions to provide clearer information about how much their cards are costing cardholders.

Harvard University Credit Union and other credit unions didn't use predatory lending tricks to jack up their fee income — we offer the same value in our credit cards as always. Many big banks, on the other hand, are hiking interest rates and charging new fees to replace lost fee income. It's a great time to evaluate the credit cards you have and determine which ones it makes sense to use. That analysis makes a credit union card look even better than ever.

Start with your credit card statements. They now include boxes that show how long it will take to pay off your balance if you make only the monthly minimum payments — and how much interest you'll pay over that time. They also show how much less interest you'll pay if you make larger payments and pay off the balance in three years.

You can use the information on your statements to compare your credit cards and determine which have the most advantageous terms. You also should continue to monitor your statements to see if the terms change.

Card issuers now have to provide 45 days notice before changing account terms, and new terms generally only apply to new transactions, not to existing balances. If one of your credit cards has disclosed an interest rate increase or new fees, don't add new transactions to it — just pay off the existing balance as quickly as you can.

If you don't already have a Harvard University Credit Union credit card, now's the time to get one. We're offering an incredibly low 3.99% APR on all balance transfers for the first year that you have the card. For more information, stop by any of our branch locations, email us or call us at (617) 495-4460.


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