Debt Shield Alerts Consumers to New Credit Card Rules and New Creditor Tactics

FOR IMMEDIATE RELEASE
(Free-Press-Release.com) March 1, 2010 -- Executives at Debt Shield, a Maryland-based debt settlement company, are alerting consumers to new credit card provisions that went into effect last week.

The final provisions of the Credit CARD Act, which went into effect February 22, are aimed at protecting consumers; however creditors are poised to recoup financial losses in ways that could still negatively affect credit card holders.

"Major protections for consumers, especially regarding interest rates, will negatively affect creditors, which is why many will attempt alternative ways to make up their profit losses," explained Debt Shield CEO Phil Fewster. "Consumers are protected in some important ways, but they still need to stay alert."

Some creditors have already raised interest and created additional fees in preparation of profit-cutting provisions. Going forward, creditors could instate inactivity fees, annual fees or charge consumers for receiving paper bills.

"Now more than ever, it is crucial that consumers carefully read all notices and statements they get from their creditors," explained Fewster.

Under the law, creditors can no longer raise interest rates without warning, unless the rate hike falls under one of three exceptions. Moreover, borrowers are now allowed to decline interest rate hikes, close the account and pay off the balance at the current rate. Credit card companies are also required to disclose how long it will take and how much it will cost to pay off the balance paying only the minimum payments. The law also prohibits shifting monthly due dates as well as issuing over-the-limit fees (unless the consumer agrees to allow transactions that push them over their limit).

"These provisions ensure greater transparency and limit some unfair creditor practices, but consumers shouldn't let down their guards," said Fewster. "The law does not cap interest rates or prohibit adding new fees."

Fewster encourages consumers to learn about the new law and understand their own credit card agreements, but most importantly he urges consumers to limit credit card purchases to emergency situations.

"Consumers tend to get into trouble when they are forced to rely on credit for everyday purchases like groceries and gas," said Fewster. "While this law is a step in the right direction, consumers are far better off when they are able to avoid using credit cards in the first place."

For more information about the Credit CARD Act, visit the Center for Responsible Lending's website.

About Debt Shield, Inc.

Debt Shield, Inc., is an award-winning debt settlement company helping consumers resolve their unsecured debt through mutually agreeable settlements in consideration of the consumers’ legitimate financial hardships. As an alternative to bankruptcy, Debt Shield provides a service for both debtors and creditors. For more information about Debt Shield, call 1-888-397-7546 or visit the website at www.debtshield.com.