Starting Thursday August 20th, credit card companies will be required to provide 45 days notice before raising interest rates. In anticipation of this new law, many credit card companies took the opportunity to push through last minute interest rate increases over the past few weeks. Thus, for many of us, the new law is too little, too late. And, unfortunately, the new 45 day notification period before an interest rate increase may not be all that helpful either.
First off, many will be hard pressed to raise the cash necessary to pay their credit card bills in full before the interest rate increases take effect. And, while having 45 days to find a new credit card with a lower rate to use for balance transfers can be helpful, credit card companies are making it quite difficult for consumers to secure 0% rates lasting longer than 6 months.
Nevertheless, the best way for consumers with good credit-which today means a score above 700-to get away from rate increases is through the use of balance transfers. However, seeking out a balance transfer credit card is much more difficult today than it was a few months ago, as higher fees and shorter 0% periods have altered the way consumers have to view balance transfers.
Before the credit crunch, finding a balance transfer credit card simply meant selecting a card with the longest 0% rate period and lowest fees. Today, choosing a credit card for balance transfers involves selecting a credit card with a good long term interest rate and lower fees. The importance of choosing a good credit card company for a balance transfer cannot be stressed enough, as there is a good chance you will be with this company for a few years since balance transfer offers will be difficult to come by in the foreseeable future.
While it would be awfully nice of credit card companies to stop raising interest rates now that the new 45 day notification rule is in effect, this is highly unlikely. However, the extra time should provide consumers the opportunity to find a good balance transfer credit card before being forced to pay significantly higher interest rates. Just remember to choose a good credit card company and not just the best short term deal.
To learn more and apply online for balance transfer credit cards, please visit the main section of Smart Balance Transfers using the navigation on the left side of this blog. We list current 0% deals as well as information to help you evaluate offers.
You can also learn more on the implementation of new credit card regulations on August 20th from the Wall Street Journal.
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