CARD Act Will Not Always Shield Consumers From Paying More

The implementation of the Credit Card Accountability, Responsibility and Disclosure Act is expected to provide more debt relief to consumers who were historically subjected to exorbitant late penalty fees and interest rate hikes. But issuers looking to curb losses may employ other measures to boost profits.

According to Reuters, some issuers have established new fees, such as those associated with processing rewards points. Others have considered bringing annual charges back to their products. But the most immediate measure consumers may see is an increase of their minimum monthly payment.

Under the act, lenders are not permitted to charge late fees that exceed the amount of a cardholder's minimum payment. To offset this loss, some issuers are planning to raise the minimum amount due each billing cycle, Reuters said.

Although a number of debt relief programs exist, consumers may help prevent the need to seek such services by educating themselves on the terms and conditions of their accounts to avoid falling into a dangerous debt cycle. Consumers who understand how certain behaviors impact their credit card bill may change their spending habits.