Credit Card Issuers Raising Rates Ahead of Reform Protections

If you recently received a notice from your credit card company that they will be raising your interest rates you are not alone. Millions of credit card account holders that carry balances are getting the very same letters in the mail. I got mine last week. Thanks American Express!

All issuers, regardless of who your credit card company is, have been rushing to get ahead of the Credit Card Accountability Responsibility and Disclosure Act (CARD) and raise interest rates before the provisions kick in.

The very first of those provisions goes into effect this week while the remaining provisions, and in fact the entire bill, will fo into effect by February 2010.

The first provision to go into effect requires that credit card issuers give you more notice to pay your bill. Previously they had 14 days to mail out a bill before it was due. That has now been extended to 21 days in advance of the payment date. This is aimed at protecting people from getting hit with late fees by giving them more notice.

The second provision that will go into effect this week requires that credit card companies give cardholders 45 days notice prior to raising their interest rates. Currently they only need to give 15 days notice.

That is basically it for the protections that will kick in for 2009. As stated, the rest will follow in 2010. The legislation even offers protections on gift cards by setting limits on the fees that issuers can charge and making every give card have a mandatory duration of at least 5 years before they expire.

Related Information:

  1. The Credit Card Reform Act Is Now Law It is now official. The long awaited so-called Credit Card Holders Bill of Rights has been signed into law and is now officially known as the (Credit CARD Act) Credit…
  2. Credit Card Issuers Hike Interest Rates Before New Reform Laws Can Take Affect Credit card reform legislation that was signed into law in May of 2009 by President Obama was designed to stop the predatory practices that credit card companies have used to…
  3. Credit Card Protections Pass the House Score one for the consumer. After riding a sea of populist anger and complaints the house of representatives passed legislation that has come to be known as the credit card…
  4. How the Banks See the Impact of Credit Card Reform The Federal Reserve did something very interesting recently. They conducted a poll of banks in the U.S. to specifically ask them how the new Credit Card Reform Act would affect…