New Credit Card Rules in Play
Some of the new Credit Card “BIll of Rights” went into effect today, but not much changed. What did change was that now the good folks at the card companies have to give you 45 days notice before jacking your rates to new levels. It used to be 15 days. And they must mail out your bill 21 days before the due date, up from the current 14 day requirement.
The 45 days notice does give cardholders a bit of an advantage. With a bit of luck and a good FICO score, you might be able to get a lower rate card to pay off the one that’s about to go up. The bad news is that closing the account could have a negative impact on your FICO score.
There’s a lot more to the bill that will go into effect in February. Those changes will have more impact on your cards. The protections that you will get in February…
Prohibiting credit card companies from raising interest rates on money
already borrowed unless it was borrowed on a variable rate card, or the minimum payment
is made more than 30 days late.Protecting new cardholders by prohibiting interest rate hikes in the first year
of an account. The only way interest rates can go up in the first year is if the card
issuer disclosed a future rate hike at a preset time when the account was opened.Imposing a new rule that “zero interest” really means zero, ending the practice
of so-called deferred interest.Prohibiting credit card companies from charging a late fee if the cardholder’s bill
was mailed out less than 21 days before the due date.Requiring that payments be allocated fairly among credit card balances with different
interest rates. Payments must either be allocated to the highest interest balance or prorated.Prohibiting credit card companies from charging interest on amounts already repaid,
through two-cycle billing.Restricting the financing of fees on credit cards where the fees or deposits use up the
majority of the available credit on the account.
If you don’t understand any of that, consider following our RSS feed. They’ll be covered in some detail over the next two weeks.
In the meantime, watch your mail carefully. I predicted the rate jacking back in January before the law was passed in May and they’ve been doing it hot and heavy. They may get you. There are some other caveats as well. I’ll cover those when I talk about the protections.
Here’s some detail on this that were on an interview that I did last night for the local cable channel.
