There often comes a time when Michigan residents deal with financial problems. No matter how big or small those problems are, it is important that these issues are addressed. Ignoring them only adds to the problem and when it comes to credit card debt, individuals may face creditor harassment and be turned over to collections. In these situations, debtors should understand their rights, as well as their options, when seeking debt relief.
Credit card holders should be mindful of their consumer rights. The CARD Act has been coined the credit card holder's "Bill of Rights." The President signed the bill into law back in 2009 and it took effect in early 2010. There are two main purposes of the Act.
First, it prohibits specific unfair or abusive practices commonly utilized by creditors, such as increasing the interest rate on a credit card balance or permitting a debtor to spend more than the credit card's limit but later imposing fees on the debtor for doing so.
Second, the Act seeks to make the details of the card more transparent to the cardholder. This helps ensure that the consumer understands the rate and fees on the credit card. Transparency also allows debtors to compare credit cards and helps them understand the full amount that they owe on current credit cards.
In today's society, it is very common for Michigan residents, as well as residents across the nation, to utilize a credit card. In some cases, individuals have multiple cards and carry a balance on all of them. While this is common and can cause very little financial impact on the consumer, failing to properly address credit card debt also can cause massive financial problems.
When credit card debt gets out of hand and a consumer is unable to make the minimum payments due each month, he or she should understand how to address these issues. There are various routes that the debtor can take in order to seek debt relief. In serious situations, this might mean filing for bankruptcy. A bankruptcy filing is a major step and should not be taken lightly. Consumers should fully understand their situation, rights and options before
filing for bankruptcy or initiating other debt relief options.
Source: Consumer Financial Protection Bureau, "The Credit CARD Act," accessed on Sept. 22, 2014