New Credit Card Regulations Become Law

They have been talked about for quite some time and now they’re finally here. We are, of course, talking about the new credit card reform regulations that are designed to protect consumers from predatory practices from banks and credit card issuers that have been deemed to be unfair.

It has been a long-time coming and it should definitely help beleaguered cardholders. In this article we are going to take a few minutes to review the major points of the new credit card laws and how they may affect you.

We realize that we have written about this subject quite a bit in the past but now that it has officially been made into law we feel as though we should point out the major aspects of the legislation.

Probably the most important piece of the legislation regards interest rates. It used to be that credit card issuers could raise your interest rates whenever they wanted to. Not any more.

If you have an existing balance then interest rates cannot be raised on it unless you are at a minimum 60 days past due on your payments. Interest rates cannot be raised on cardholders within the first 12 months unless it is an introductory offer.

Cardholders will also see a change in the way their statements look. Now they will include information that displays how much needs to be paid every month in order to have the balance completely paid off in 3 years.

In addition to that, there will also be a calculation that shows how many months it will take to completely pay off the balance on a credit card account if just the minimum payment is made each and every month.

Fees are addressed as well. Annual fees cannot exceed 25% of the credit limit during the first year that the consumer owns the card. After that there are no limits on what the credit card issuers can charge as an annual fee.

And the final major point addresses grace periods. There is now a requirement that credit card statements must be mailed out at least 21 days before a payment is due. Many card issuers have already extended their grace periods to 25 days.

We will, of course, be following up on any new developments. You can bet that the credit card companies will be finding new and innovative ways to make up for the money that they will be losing because of this legislation. We will stay top of  that.

Related Information:

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