What Credit Card Reform Has Brought Us

So now we know that it’s a done deal. The Credit Card Reform Act of 2009 has been signed into law by President Obama. And now the politicians can sing their own praises and tell tales of how they are champions for the consumers. We are not going to help them do that. Quite frankly, this type of legislation should have then drafted and passed many, many years ago.

We are however, are going to discuss exactly what these new laws will mean to credit card holders. Let’s take a look at how these new regulations will affect us.

First off, these new regulations are not going to take effect until about nine months from now. While many consumer advocate groups were pleading their case for immediate relief, we now know that that’s not going to happen.

To sum up what the changes are going to look like:

For starters, the credit card companies will have to give cardholders 45 days advance notice before raising interest rates.

Paying your bill will become easier because the credit card companies will be required to accept payment either through traditional mail, over the Internet, and by telephone. All means of payment will be free. In other words, there can be no “convenience charges” or fees added.

If you’re late making a payment you will have a 60 day grace period before the credit card issuers can raise your interest rates.

If you should fall behind in your payments by 60 days or more you can bet your rates will be raised. However, your previous rates must be restored if you pay at least your minimum payment on time for at least six consecutive months.

Promotional rates will still be allowed to be offered by the credit card companies but they must stay in effect for at least six months. Along those same lines, card issuers cannot raise interest rates in the first year that an account is opened.

Here is an interesting practice that will no longer be allowed; credit card companies used to have an archaic rule that payment must be made by certain hours, say noon-time on payment day, or that payment would be considered late. Now 5:00 PM is the cutoff time for getting a payment in on time.

Credit cards will be more difficult for individuals under the age of 21. In order to be issued a credit card these young consumers will have to show proof that they have the ability to repay their debts, or have a cosigner such as a parent assume responsibility along with them.

Fine print on credit card statements is a thing of the past. Credit card companies will have to use 12 point font or larger on statements, bills and applications.

As these new laws are phased in you can bet that the ever-wily credit card companies will be coming up with new ways to tack fees onto account holders. You can also bet that there will be more than one loophole discovered and exploited. Stay tuned and we will be there to let you know when it happens.

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…
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  4. 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…