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Clarky Davis, The Debt Diva, Warns New Credit Card Accountability, Responsibility and Disclosure Act is Not A Cure for Financial Woes

Clarky Davis, The Debt Diva and credit advisor at CareOne Services, Inc. today counseled that the Credit Card Accountability, Responsibility and Disclosure Act of 2009 (CARD) has new regulations that will benefit consumers; however, the act should not be viewed as an automatic solution to financial problems. While the Credit Card Accountability, Responsibility and Disclosure Act, which takes effect on February 22, 2010, will have many consumers breathing easier, Davis warns CARD carries challenges, which could cost consumers large sums of money and prolong debt burdens.
A driving factor in unmanageable credit card debt is a consumer’s inability to pay off of a balance due to accumulating additional costs from fees and escalating interest rates during the term of the agreement. Davis supports the provisions of the new laws that will help prevent balances from spiraling upward, such as the new prohibition on banks from raising interest rates for one year. Davis is cautioning consumers to note that this provision is only a temporary fix and will not circumvent interest rates from increasing after the first year. The Debt Diva alarmingly points out that there is no ceiling on how high interest rates can rise.
“While the law does provide many important consumer protections, there is one glaring omission in its provisions – caps on interest fees,” said Clarky Davis, The Debt Diva and credit counselor at CareOne Services, Inc. the leading debt service provider. “If you borrow money, you should expect to pay for that privilege, but companies can continue to punish a struggling consumer by raising interest fees to excessive rates of 18% and beyond.”
Another tactic that banks are employing is to fight back with new fees that do not fall under the protection of CARD. Many credit card issuers are adding annual fees, implementing higher balance transfer fees or even including an inactivity fee for consumers not making purchases in a 12-month period. The Debt Diva is advising consumers to review their current credit card statements now for changes. CARD was signed into law on May 22, 2009, and although three provisions did go into effect in August 2009, others won’t be implemented until February 22, 2010 and has given creditors ample time to prepare for revenue loss and change agreement terms.
Clarky Davis urges those who fall victim to the banks’ increase in interest rates, changes in payment terms, or reductions in credit limit prior to the implementation of the new law, to only seek help from a licensed and accredited debt management service provider like CareOne Services, Inc.

SOURCE Clarky Davis, The Debt Diva