Credit card help on the way

Questionable credit card company practices have been dogging consumers for years. But a Credit Card Bill of Rights is working its way to congress.

1) Get the headlines
Here are some proposals in Representative Carolyn Maloney's Credit Card Bill of Rights that will be considered by the House of Representatives. First, it prevents companies from applying interest rate hikes retroactively to old balances as long as the customer is in good standing with that particular card. It also prohibits card companies from arbitrarily changing the terms of their contract. And finally, the bill requires that consumers get 45 days notice of interest rate increases and companies must mail billing statements 25 days before the due date.

2) Watch out for fees
Thanks to the credit crunch and a growing number of defaults, card issuers are coming down hard on borrowers. A recent study by Consumer Action, a consumer advocacy organization, found that more credit card companies are cutting credit limits on your cards – which can hurt your credit score, especially if you charge close to the limit – and raising interest rates or terms at any time and for any reason.

3) Mitigate your risk
Pay your bills online. Consumer Action's survey found that a majority of lenders, even if your payment was received one or two days late, you would trigger a default APR averaging almost 27 percent. If you find that your credit limit was cut, call your issuer and ask to have your previous credit limit raised. In the meantime, try to keep your balances less than 30 percent of your credit limit.

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