Credit Card Debt Relief Laws

Almost 95 percent of America's revolving debt is credit card debt with the average US family having $15,000 debt. The economic recession has led to pay cuts and job loss affecting the repaying powers of a large percentage of the citizens. The situation is further compounded by fraudulent companies trying to make a fast buck by luring these citizens with false advertisements like government funds for credit card debt relief. Let it be categorically stated that the US government does not pay individual debt, what these companies are talking about is the Credit Card Accountability Responsibility and Disclosure Act 2009. This act has made sweeping reforms to the way credit card companies conducted their business, thereby helping the people come out of their situation. People who are struggling with credit card debt can look at debt consolidation programs offered by agencies associated with the Association of Independent Consumer Credit Counseling Agencies (AICCCA).

Credit Card Debt Relief Act

The US government enacted the Credit Card Accountability Responsibility and Disclosure Act 2009 which was enforced in February 2010 to make reforms in the credit card industry to curb the wide scale exploitation of unsuspecting citizens. These, credit card debt relief laws aim to put the brakes on the mounting debts and thereby enabling citizens to come out of their debts. The act has been popularly known as the Obama credit card debt relief act and some of the reforms it made are:

• Credit card companies cannot arbitrarily change the rate of interest without informing the customer at least 45 days in advance. The customer then has up to 3 billing cycles to either opt out of the program or accept the new interest rates.
• Companies now need to assign fixed due dates for repayment of debt and if that date falls on a weekend or bank holiday they need to move it forward to the next working day. Customers will also have to be notified at least 21 days in advance about their due dates.
• Credit card contracts need to be maintained online by the companies to enable government scrutiny at any given time. The font to be used for the printed contracts is also stipulated by the government under the new act.
• Companies will also have to do away with double billing cycles used to overcharge the customers and also have to give clear definition of the terms, 'fixed rate' and 'prime rate'. Late fees cannot be accrued if the customer has proof of mailing the payment at least 7 days before the due date.

Credit Card Debt Settlement

If you are looking to settle your credit card debt, it is advisable to initiate direct contact with your debtors without any third party mitigation. Most debtors will consider a dialog with their creditors if it has something to do with settling the debt. Try to get them to wave off any late payment fees or dues and restructure the interest rate. Make sure you have your financial details and a repayment plan ready before you to initiate contact with the credit card companies.

If you think that this will not work in your case then try to take a consolidation loan which will have a much lesser interest rate than the one you are paying currently for the credit card debt. Most secured loans will have a lower rate of interest than credit cards and this at times is the best option. You can also look to hiring a debt settlement company to negotiate on your behalf. It is advisable to choose one wisely, make sure that the agency if affiliated to the Association of Independent Consumer Credit Counseling Agencies (AICCCA) or National Foundation for Credit Counseling (NFCC).

One of the most important thing about getting out of credit card debt is to learn financial wisdom understand the correlation between income and expenditure. There are several programs which teach financial management, seek these out and the next time, make informed decisions before you spend or borrow.