What’s In Your Wallet?

That famous question from a credit card commercial is one that we should all be paying attention to today. Many of you are aware that President Obama recently signed into law new credit card regulations that are designed to protect consumers. This new law does exactly that with a variety of rules focused on leveling the playing field between the card issuer and the consumer.

I was reminded the other day that well intended regulations usually have unforeseen consequences. I received a notice from a national credit card provider that an “inactive” card I have with them was being cancelled. I didn’t use the card and will not miss it, but this would have never happened without the new credit card law. Credit card companies are looking very closely at their card portfolios and looking to offset the lost income from the new regulations.

Make sure that you pay close attention to any mail that you receive from your credit card provider. We often throw this legal mumbo jumbo away, but we no longer can afford this luxury. Take time to sit down and read any Notice of Change in Terms and see if you can live with the changes and when they take effect. This is critically important for cards that you use on a regular basis.

We all need to go back to the basics and understand the true cost of the card. Remember that the lowest rate is not always the best deal. Fees and charges usually account for a great deal of the profit made by credit card companies. Take the time to add up the total “cost” of the cards that you hold and then use the lowest “cost” card.

Finally, take another look at your local financial institution. With the recent changes the overall value from local providers should compare quite favorably with national providers. Best of all, if you have a problem or a question you can walk directly into your institution and get your question answered. If you have tried to get a simple question answered from a national credit card company you know how valuable local service can be! So, make sure you know “what is in your wallet” and “what it really costs!”