Chicago Bankruptcy Lawyer Blog

Don't be surprised if you see an unfamiliar site in your mailbox soon - credit card offers.

That's right, after many months of tightening up credit, banks are on a mission to lure back customers they hope will start spending again as the economy picks up. And that means more credit card pitches, according to Chicago bankruptcy attorneys.

It's a good sign for the economy. But it can be a bad sign for careless consumers. As always, using a credit card to spend more than you earn can quickly land you in debt - and with a host of new fees, these new cards can make it harder than ever to climb back out.

Continue reading "Chicago Consumers Might Notice An Increase in Credit Card Offers As Banks Loosen Up Credit" »

It seems like just yesterday that a round of credit card reform laws was enacted (well, actually it was just last month). But the Federal Reserve already has another idea to help consumers.

If passed, a proposed law will limit credit card fees by prohibiting your credit issuer from charging you more than your violation. So if you exceed your credit limit by $5, then you'll owe $5 - instead of the $40 they currently charge. Credit card companies would be banned from charging more than one fee for the same violation and inactivity fees - penalties levied for not using an account - would be eliminated.

Pretty cool, huh? But here's the catch. To benefit, you have to use less credit. And for some folks, filing for bankruptcy is the best way to reduce dependence on credit cards - and therefore lower debt.

Continue reading "Consumers in Chicago Could See Limited Credit Card Fees If New Law Is Passed" »

It's no secret that recently enacted rules could make having a credit card easier. But while creditors must now limit when they can levy fees, raise interest or even send out a bill, your credit score is still ultimately in your hands, say Chicago bankruptcy attorneys.

The last of President Obama's credit reform measures went into effect Monday. And here's some of the good news.

• Your creditor can no longer raise the rate on an existing balance - assuming you make your payments on time - so if you normally pay 14% on a $10,000 debt, you don't have to worry about suddenly paying 24%.
• Creditors can no longer charge you for exceeding your credit limit, unless you opt in for this service.
• Creditors must give 45 days notice before making certain changes to your account, like raising rates or fees
• You must receive your bill 21 days before it's due
• If you have multiple lines of credit with different interest rates on a single card - for instance, one for cash advance and another for purchases - creditors must apply any payment over the minimum to the balance with the highest interest rate (instead of the lowest rate, as they used to do).

Now here's the catch - and how you can make it easier on yourself.

Continue reading "Chicago Bankruptcy Attorneys Analyze New Credit Card Reform Laws" »

Credit card companies are up to their old tricks.

With the last of new credit card laws scheduled to go into effect this February, banks are doing just as predicted - finding new ways to charge credit customers.

On the bright side, the legislation is already helping consumers in a few key areas. You may have already noticed that you're receiving bills far in advance of the due date, making it easier to avoid those outrageous late fees. And if worse comes to worst and you do make a late payment, you still have 60 days to pay up before you're punished with a higher interest rate (previously, banks could jack up your rate if you were as much as an hour past cut off time on the due date).

But here's the catch. Though your credit card company can't raise your rate on existing balances for no reason, they will be able to raise rates on variable rate cards or on future balances of any card - sometimes to as high as 80 percent!

Continue reading "Credit Card Interest Rates Hit New Highs" »

At first glance, a gift card seem like the perfect present. You don't have to worry about getting your friend or family member something she can't use - with plastic, she can buy whatever she wants. Or can she?

Research shows that, if your gift recipient procrastinates, you could be giving more holiday cheer to retailers than your loved one.

On the one hand, things might seem to be looking up. New credit card laws will also apply to gift cards, limiting fees that can be placed on cards inactive for less than a year and preventing funds from expiring on certain cards within five years. On the other hand, that only addresses one party - the gift recipient. But if the card gets lost, forgotten or otherwise goes unused, either fully or partially, where does that leave you, the gift giver, who could probably use some of that money back?

Continue reading "Gift Cards Might Be Easy Presents, But They Don't Come Cheap" »

New consumer protection laws might mean creditors have to give up charging sneaky hidden fees, but unfortunately it doesn't protect against another one of their tricks - the minimum payment.

When most folks pay their credit card bills, they pay the minimum due - usually set at between 2 and 4 percent of the balance. It might seem like a good deal at first - when you buy that $500 flat-screen TV for Christmas, for instance, you'll only pay $10 a month, making the large purchase feel more affordable during a time when most people are strapped for cash.

But that's what creditors want you to think. In truth, you'll be forking over far more money than if you had coughed up the cash upfront. Minimum payments were created to keep you in debt - and paying your creditor - for as long as possible.

Continue reading "Minimum Payment Can Cause Maximum Debt" »

If you're in the habit of tossing mail from credit card companies before opening the envelopes, you might want to rethink your strategy.

With creditors in the process of making changes to counteract stricter regulation, it's likely that some of those envelopes you assume are just advertisements or routine legal notices are actually important updates from your credit card company of changes that could impact you financially.

For instance, both Bank of America and Citibank announced plans this year to begin testing an annual fee on certain credit cards. And American Express recently notified holders of its airline cards, including Delta, JetBlue and Hilton and Starwood hotels, that it would be revoking rewards to customers who don't pay their bills on time, whether they're repeat offenders or normally careful consumers who happened to make a one-time mistake.

Other predicted changes include higher late fees, a fee for calling customer service, receiving paper statements or merely requesting a higher credit line and higher interest rates. My words of advice? Check your mail carefully.

Continue reading "Read Your Credit Card Junk Mail Before You Toss It" »

There's a lot of (legal) pick pocketing going around, but that shouldn't mean we have to put up with it.

Remember last month when we discussed the growing cost of credit cards? In response to new legislation meant to protect consumers from unfair fees and term changes, credit card companies are lowering limits, raising rates and adding brand new costs - like an annual fee or a penalty for non-use.

Now, banks are getting in on the action by becoming greedier with their checking accounts. Unlike a credit card - which, believe it or not, you can choose whether or not to use - checking accounts are pretty much a necessity now that we don't hide our cash under the mattress like Grandma did. So it was a little disturbing when I noticed my former bank had started charging a $9 account maintenance fee each month.

Continue reading "Banks Find Ways to Make Checking Accounts More Expensive, Chicago Bankruptcy Lawyers Say" »

Something rare happened to me recently - I actually heard some positive economic news. In this day and age, that's reason for some (cautious) celebration.

So here's the happy newsflash. Proof has finally arrived that the $787 billion economic stimulus package passed in February was (no surprise) worth the money, according to a New York Times editorial. Last week, second-quarter economic performance results were released and, at long last, the economy seems to be shrinking at a slower rate. We're losing 1 percent a year instead of the more than 6 percent loss we experienced in the first quarter.

OK, so we're still at negative economic activity, but it's a lot closer to becoming positive. And there's another good sign: the majority of the stimulus money hasn't even been spent yet. That's due to happen between now and September.

But the outlook isn't all roses (you knew there had to be a catch, right?).

Continue reading "Illinois Bankruptcy Lawyers See Economic Growth, But Warn Road to Recovery Might Be Long " »

As Americans, we're known for seeking the easy way out, be it a magic diet pill that lets us lose weight without diet or exercise or a little plastic card that (seemingly) allows us to buy whatever we want, regardless of whether we can afford it.

So it shouldn't come as a surprise that people are abuzz over the Cardholder's Bill of Rights, the "new" credit card legislation that promises to protect consumers from credit card companies' tricks. But, as usual, miracle cures aren't usually what they're cracked up to be.

Continue reading "Illinois Bankruptcy Attorney Explains Cardholder's Bill of Rights" »