Are you still convinced that credit cards are necessary, or even essential? The new legislation and response from credit card companies may help you change your mind. This new legislation will place heavy restrictions on credit card companies when it comes to raising the interest rates of those who carry a balance from month to month. This legislation, if passed as currently written, will give consumers who have a balance on their card up to sixty days before the company can raise the interest rate on the card. It will also force the companies to restore the lower rate if the consumer pays the minimum balance on time for six months.

This may sound like a great development for consumers, and it is if you are someone who carries a balance from month to month. However, if you have a credit card only for emergency purposes or you have a card that you pay off monthly to avoid the extra fee, this is not good news for you. The credit card companies, upset with the new regulations and restrictions, have made it known that if they loose money in one area they will make it up in another. This may mean a rise in interest rates of people who do not carry a balance from month to month. It may also mean higher yearly fees, and lower credit limits.

So, even if you try to budget, and be financially responsible the credit card companies will now punish you. I can’t think of a better reason to dump the plastic, can you?

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Photo credit: Consumerist