For years I've been telling kids to get in the habit of reading those credit card disclosures - yeah right! It's like asking them to read the nutrition label on the Red Bull cans. However, it's becoming clear that we need to do that now more than ever.
Credit card companies are being squeezed in two ways - from upcoming new federal regulations that go into effect in 2010 and from deteriorating portfolio balances with higher delinquencies and defaults. Soon they can expect a larger percentage of borrowers filing bankruptcy.
To address this, they are modifying existing credit card accounts with higher interest rates and fees, lower credit limits, or closing accounts to further advances. After all, they are in the business of making a profit - just like any other business. Sure, we can debate that level of profit, but at then end of the day, nobody is in business to lose money.
Which means that you need to open those envelopes from your credit card company and read the information. I know it can be a beast to get through - it's designed that way. But getting through it and understanding it is the only way you will know what is going on with your account.
Read this article from the NY Times http://www.nytimes.com/2009/01/31/your-money/credit-and-debit-cards/31cards.html
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