New Credit Card rules take effect
Finally some changes to the credit card industry! A lot of changes take effect today. But let’s not get too cozy in the thought that we are going to stop these companies from abusing the system. I am sure they will still find ways to stick it to the consumer.
The Credit Card Act of 2009 actually initiated the beginning of some changes back in August – but the majority of changes, and the most meaningful ones in my opinion take effect today.
To me the biggest crime they got away with was, not just raising interest rates for any infraction of their terms no matter how small, but after such an infraction, raising the interest rate on your ENTIRE balance. So say you have had your card for 10 years and been on time with payments 100%. Perfect record. Then you miss your payment by one day. Just one day late. Under the old rules (basically no rules) they could immediately raise your rates – and not only on any new debt you will incur with the card, but ALL of your existing debt as well.
Well these new rules are supposed to stop that. Now your card company must send you a notice at least 45 days before they raise your rates AND the higher rates only apply to the new charges to your card. There are a lot of specifics which may alter their requirements based on your specific agreement, but overall it is a huge step in the right direction.
Another neat requirement on the card companies is to include in your statement information about how long it will take you to pay off your current balance if only making the minimum payment. A lot of people will be shocked to learn just how long they can be on the hook paying these loan-sharks.
I would recommend going to the Federal Reserve website here and having a look at the new rules. It is important for you to be informed.
