Credit Card FAQ
Why are Not all Credit Cards Available in Wisconsin?
Some credit cards are not available all across the United States. There are credit card companies who refuse to sell their products in some states like Wisconsin. Why is this issue of credit card availability in Wisconsin so important that some credit card companies who make millions of dollars in acquiring new customers, refuse to sell their products in this state?
One of the biggest reasons is the enhanced credit card legislation in these states that is designed to favor consumers rather than the credit card companies. Any credit card company that does not comply with the existing state laws is barred from selling their products in that state.
State Laws Affect Credit Card Availability In Wisconsin
The Credit Card Reform Act of 2009 was passed to protect people from what can be called the many unfair practices of the credit card companies. In states that have passed this law, credit card companies are not allowed to increase interest rates retroactively. This means that the companies will no longer be able to increase the interest rates on purchases made in the past.
Another major point in the law is that double cycle billing or the two cycle average daily balance method of calculating APR is also illegal. Effectively, in the double cycle billing method, interest is charged not only on the purchases made in the current month but also on the average daily balance of the previous month. This leads to a higher outstanding balance on the credit card statement which the cardholder has to pay. People carrying balance on their credit card one month to the next will also have to pay additional finance charges.
Such practices were considered unfair to the public and were outlawed in some states. This affected the availability of credit cards in Wisconsin and the other states that upheld these laws.
Other Changes Made By This Law
The state of Wisconsin bars creditors from charging excessive fees and large penalties to the cardholders. The practice of " universal default" makes it possible for a creditor to raise interest rates on the card even if all the payments to that card were made on time and a late payment was made to a different credit card account. This practice is no longer allowed in Wisconsin.
Other advantages to Wisconsin residents include the right to agree to a set of terms with the credit card companies when they purchase the product. Once agreed upon, these terms cannot be changed for the period of one year. Such changes in the law have made credit card companies think about making some of their credit cards available in Wisconsin.
The law is made for consumer protection. It puts the safety and the convenience for the consumer first. For example, over the limit fees are one of the many fees and charges that credit card companies charge their consumers. In Wisconsin, if a person is about to make or has made purchases that go over the credit limit, it is the consumers right that the card companies have to notify the cardholder about their faux pas. The consumer can then decide if they want to continue with the transaction and accrue the fees or cancel the transaction.
Another issue that affects credit card availability in Wisconsin is the language used in contracts. When people of this state choose to apply for a credit card product, the terms and conditions to use this account must be made in plain language. Once the contract is made, any changes that are made to the account must also be in the same clear language.
If a consumer is paying minimum balance, he or she must be informed about the length of payments that need to be made to fulfill the outstanding debt. The credit card companies also have an obligation to inform the consumers how much they need to pay the credit card every month to ensure that there is zero balance remaining at the end of 36 months.
As a result, consumers stay better informed about their debt to the credit card companies and can choose to pay off that debt sooner. All this affects the availability of credit cards in Wisconsin.
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