Credit card reforms kick in today!
Well, the first phase of President Obama's Credit CARD ACT- start today. Here are some of the new changes, courtesy of the Associated Press.
Q: What changes are going into effect this week?
A: As of Thursday, credit card companies will be required to notify customers 45 days before changing interest rates or other significant terms of an account. They also must make sure customers have 21 days between the time statements are sent out and the payment is due, up from 14 days under existing rules.
Q: What else is going to change?
A: Starting in February, credit card statements will begin to spell out in an easy-to-read way how long it will take to pay off a balance if you make only the minimum payment each month.
Credit card companies will no longer be able to raise interest rates on existing balances if you've been paying on time, won't be allowed to raise rates the first year an account is open unless a time-limited promotional rate is explained up front, and will have to review accounts every six months if they do hike rates, to see if they should lower them again.
They will also no longer be allowed to charge fees for going over credit limits unless the consumer agrees to pay that fee, and must apply any amount of payment over the minimum to the highest interest rate balance first.
In addition, there are new restrictions about granting credit to students.
Q: Will these rules only affect credit cards?
A: There are also parts of the new law that limit things like inactivity fees and expiration dates on prepaid cards and gift cards.
Have you noticed your credit card interest rates increase right before today? A lot of credit card issuers raised the rates in anticipation of today. Boo hiss!
2 Responses to Credit card reforms kick in today!
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There have been some rumors that there are some loopholes in the credit card reform like the details about the 45-day notice in increasing interest rates. Some reports says that after 14 days of issuing the notice, banks can go ahead and apply the changes even if you reject it. ???
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