Most often, people seek help from debt relief companies like Freedom Debt Relief (FDR), when their debts become mountain high and become rather impossible to manage single handedly. FDR, has quite a good track record in handling debt related problems, mainly by providing debt negotiation or debt settlement as solutions to their clients. Most of the debt settlement companies usually aid their clientele with unsecured debt. Credit cards form a major part of one’s unsecured debts and generally the fees and other charges levied on the credit card accounts might be so high that they might in instances be more than the actual card usage. When a debt relief company or a debt settlement company settles or negotiates with the credit card issuers on behalf of the debtor, the amount that gets negotiated would actually be the fees and charges that get levied on the card account. Hence when a person drowned in credit card debt ends up paying nearly 50 percent less than what the debtor owes, the amount that gets forgiven by the creditor would in all probability be the penalty fees and some of the other charges that the creditor might have levied according to the card account opening agreement signed.

At the time of the credit account opening, the terms and conditions regarding the annual fee, penalty charges, etc. might have been in fine print. It would be highly beneficial to read the offer document which would be written in fine print. There was a time when the credit card issuer could change the pricing of the card or other transaction fee or penalty charges without prior notice. However after the Credit Card Act came into place, the card issuers such as the banks and credit unions now need to give their consumers a 45 day prior notice about the impending changes in the schedule of charges. It would be useful to understand that with the Credit Card Act in place, the credit card issuers, namely banks and credit unions would not be able to charge the consumers certain fees and also there would be a cap on fees that they can charge.

Some of the benefits of the Credit Card Act are that the credit card issuers would not be able to indiscriminately add fees – especially penalty charges. The Act states that the penalty charges levied would have a cap and that the charges levied may not exceed the dollar amount involved in the violation. The Act also provides for a one-fee limit. This would mean that the card holder can no longer be charged more than one penalty fee for a single deviation. In other words, one penalty fee cannot result in more penalty fee. However, the Act does not prohibit fees under new categories. In case of card usage over the permitted card limit, the over limit fees that might be charged would need to be equal to less than the dollar amount of over usage.

However, the Credit Card Act does not specify a cap for the annual fees to maintain the credit card account in general. Customers who hold a credit card but do not use it may no longer be penalized for inactivity and would no longer be liable to pay annual fees. Non-penalty fees however, would not have a cap. So the issuer may charge as per the company’s rules. It might be beneficial to understand each of the fees that the creditor may charge and the cap related to each penalty fee so that one may be in a better position to negotiate with the creditor for fee reversals. In case the burden of debt might be high, then it might be prudent to employ a debt settlement firm to help deal with the creditors as this might help being debt free in a period of two to four years without filing for bankruptcy.

Author Bio: Freedom Debt Relief

Category: Finances
Keywords: Freedom Debt Relief