The new credit card rules that affect your money management planning are supposed to protect you. But do they?

No doubt, the days of easy credit are long gone, along with very low introductory rates for extended periods, no annual fees, and high credit limits for just about anyone who wanted a credit card.

Let’s look at what is coming with the new credit card rules

Effective February 22, 2010 the Credit Card Act of 2009 (Credit Card Accountability Responsibility and Disclosure Act of 2009) goes into effect. Quite a few of the changes protect the consumer, for example:

1 – Your card company has to notify you at least 45 days in advance of any modification they intend to make in your account, like raising the interest rate you pay, changing certain fees like late fees or annual fees. However, there are situation where they do NOT have to notify you in advance.

2 – They can only increase the interest rates on new charges, while the existing charges have to remain at the old interest rate.

3 – They have to get you your credit card bill a minimum of 21 days before the payment is due so you have time to make the payment without being late and getting dinged for a late fee or triggering other unpleasant events.

4 – The card company can only charge interest charges on balances in the current billing cycle; no more double-cycle billing.

5 - Protect consumers who are under the age of 21 by making them show that they are able to make payments, or require that they have a co-signer, in order to open a credit card account.

The New Laws Will Also Hurt Consumers …

While, the new legislation prohibits a variety of credit card billing practices, the banking industry stands to lose as much as $50 billion in lost revenue as a result of the new restrictions.

There is little doubt that they will take action to make up for these losses. In fact, the issuers of credit cards are taking action now to implement changes before the new law goes into effect that will cost the consumer more. They are:

1 - Raising annual interest rates on current balances,

2 - Lowering credit card limits,

3 - Changing from fixed interest rates to variable rates,

4 - Stopping the low promotional rates campaigns, and

5 – Starting to punish consumers who don’t get their statement on-line by charging a fee for mailing you a paper statement.

There is a lot more information you can learn from this website Federal Reserve’s consumer information site that explains the new credit card rules in-depth.

Have your credit card companies made any of these changes on your cards? Leave a comment…

As the U.S. and global economy continues to struggle and credit gets tighter, steady cash flow becomes more and more important to the survival of a business. One source that has been around for decades is accounts receivable factoring; also referred to as invoice factoring. This tool has become an important small business money management strategy.

Invoice factoring is not just for manufacturers. Many types of business owners, including Dentists, Chiropractors, and other healthcare providers have turned to this method to insure a steady stream of cash into their businesses.

Kent Harlan, owner of Ozarks Capital Funding has been a reliable resource for factoring for healthcare professionals for a long time, and has even written a book about it that makes this tool easy to understand.You can read his blog article Factoring For Medical Providers and check out his book to learn:

- How factoring can be better than bank loans

- The easy application process

- How fees are determined – you’ll be surprised

- The other services factoring companies provide that will save you money

- How your company can take advantage of the infusion of working capital from factoring

- How factoring companies communicate with your customers

- How to find out if you qualify before you apply

- Why utilizing a factoring broker is advantageous to you

If you are in the Dental industry, you should also visit Kent’s website focused on Dentists at www.dentalpracticecash.com

I recently received an email from a visitor to my Money Management Solutions website who wants to learn how to pay off her mortgage quickly without having to attend expensive seminars or buy expensive software to do this trick.

I realized that this was a question a lot of people might have, especially during this current economic crisis. I decided to share my answer here for that reason.

Brenda asked Sandra Simmons:

Is there some sort of “mortgage accelerator” program where your mortgage gets paid off in a fraction of the usual 30 years time? I want to learn how I can do this myself for my mortgages. — Brenda B.

Answer:

Brenda: You can do this yourself by making extra principal payments each month.

Example if your mortgage payment is $2,000:

 If, when you make the payment for 8/1, you include an extra payment for the principal due 9/1 of $302 then you don’t ever have to pay the interest of $1,698 that was due 9/1.

Your next payment due, which you will pay on 9/1, is actually the 10/1 payment.

Then on 9/1, when you make the 10/1 payment, if you also pay the principal payment from the 11/1 payment, then you save that interest. If you do this you will cut your mortgage payoff time in half.

Write on your payment coupon “Extra Principal Payment $302” so there is no question of where you are directing the funds, and keep a copy of the coupon and the check for your records.

If you want to accelerate it even faster, say cut it by 2/3rds, if on 8/1 you make the payment and include the principal amounts for the payments due 9/1 and 10/1, then you don’t pay the interest on the 9/1/and 10/1 payments.

Then on 9/1 when you make the next payment you would pay the payment for 11/1.

Ask your mortgage lender for an amortization statement of your loan so you can actually see the correct principal and interest amounts broken down for each payment. They may not want to give you one so you can’t do this as they lose interest income, but you have a right to have it. Even if you have to pay them for it, it is worth it. Typically they charge $25 – $75 for an amortization statement.

Sandra Simmons is the President of Money Management Solutions, Inc. She specializes in helping business owners and individuals manage their money to achieve financial freedom. Claim your FREE Debt Reduction Solutions Guide.