If you’ve received a notice that your interest rate on your credit cards are increasing, don’t be surprised if this isn’t the only thing that changes in the coming months. You may also start to notice that your minimum payments may be lower. While this may at first strike you as being a good thing, in the long term, it means you pay more money to the credit card company.
Due to these changes from credit card companies (a plot to make even more money off debtors), the Credit Card Accountability, Responsibility and Disclosure Act of 2009 is trying to put the brakes on credit card companies money making squalid tactics.
Credit card companies will have to display in a highly visible area how much your interest rate is. They also must show you what your minimum payment is and how many months it will take you to pay off your credit card if you only pay the minimum due each month. You also should see information about credit counseling in case you can’t pay your bill. Your statements should be much easier to read and helpful to you when budgeting how to pay off your debt.
How These New Changes Help You Buy a Home for Sale and Get a Mortgage Loan
You be wondering how this applies to homeownership. Your debt to credit ratio is of great importance when you buy a home for sale. If you have more debt than you have credit, you will have to work on reducing that ratio before you will be able to get a mortgage loan with an affordable interest rate (remember, it’s based on the lender and your financial situation).
Not only does your debt to credit ratio matter, having a detailed credit card bill will help you pay off your debt faster so you can start to save for a down payment on a home, which can significantly improve your chances for a home loan and lower your monthly payment.
So if you’re in the market for a new home for sale but need to work on your budgeting, take the increase of interest rate on your credit cards and new detailed statements as a motivation to finally get your head above financial waters and buy your perfect home.
February 24th, 2010 at 11:23 pm
i enjoyed the article, you have a nice blog.