New credit laws take effect today

Thanks

I am sure they will try to catch as many people and cards before it becomes law

Hey Mike,

Thanks for sharing this news in the forums. It's true that new credit card laws will come into effect today onwards. It would been better if the government had immediately made the rules effective rather than giving time to the credit card issuers to raise the rates. According to the new rules, credit card companies will have to give consumers 45 days notice before raising their interest rates significantly. With the announcement of this new law, the credit card companies started raising the interest rates in such a way that consumers are feeling the pinch of it.

all of the credit card issuers have fallen all over themselves to be sure to raise their rates as rapidly as they could. it is a travesty.

if we could rip them up, never use them again, it would be a benefit to us all.

beware the almighty credit card - it will be our downfall, financially.

Thats a good idea for soem one who gets temepted to buy everythign they like on thier card and worry about the payment later

We cannto just blame the credit card companies, consures also play a significant role in this

say what? "consures"?? what's that sunny?

It was "Consumer"

Man stop being too picky

picky? i hope not...but let's be frank about it: "consures" isn't close enough to "consumers" for anyone to be able to figure it out...at least that's my opinion.

besides, sunny...i am an editor also...i can't overlook mistakes no matter what...if that means i am picky, well so be it. but an editor needs to be picky or else find a new line of work.

Hi,

Credit Card Accountability, Responsibility and Disclosure (CARD) Act of 2009 promises a lot in safeguarding the interest of the consumers and protecting them from the profiteering credit card companies. The first set of rules, as proposed in the Act, has been made effective since August 22, this year, while the rest is scheduled to be implemented from February 22, 2010.

Some of the changes that have already come into effect include the following:-

• Prior intimation of interest rate & fee changes: The credit card companies are now required to send the consumers a notice at least 45 days before changing interest rate or any fees. Before the new law was enacted, the creditors had to send a 15 day's notice to the card holders.


• More time to pay off bills: The credit card bills are now to be sent to the consumer 21 days before the due date. Consumers will have more time to pay off their bills. This change also prevents the lenders from moving up the due date without notice and eliminates the likelihood of late fees.


• No arbitrary deadlines: The new laws make it illegal for credit card companies to set cut-off times before 5 p.m. on due dates. Card issuers will no longer be able to set an early morning or other arbitrary deadlines and charge late fees for payments due on holidays, weekends etc.


• Right to opt out of interest rate hikes: Credit card holders are no longer at the mercy of the card issuers when it comes to opting out of interest rate or fee increases. They can now cancel their accounts and pay off existing balance at the original rate.

Hi Savior,

Thanks for the updates. Apart from what you have mentioned, there are certain other changes which would come into effect after February 22, 2010.

• Prior to a notice of 45 days, the credit card issuers cannot raise rates on new balances. Also, the credit card issuers will no longer be able to raise rates because a customer failed to pay some unrelated creditor.


• Except under certain conditions, the credit card issuers will not be able to raise the interest rates. Those conditions include: 1) Expired promotional rate 2) The index rate to which the interest rate was related gets increased 3) 60 day late payment.


• The concept of "Double-cycle billing" will end. It was under this concept that the card companies based finance fees on the balance of previous cycle in addition to the present balance.


• The credit card companies will be allowed limited marketing contact with college students. Also, the students less than 21 years of age will have to prove that they have sufficient income, have a cosigner parent, or take a certified financial education course to qualify for credit card.


• Once the new laws are effective, the issuers must first apply payments to the balance with the highest interest rate. Earlier, the credit card issuers used to apply payments to the lowest interest balances first.


• Customers can opt out of over-limit fees. Thus, transactions over their credit limit will be declined. Creditors will have to inform the credit card users regarding this option annually.

Take care.

The new credit card rules may get effective from December 1st, 2009. The main reason for moving up the date may be to punish the credit card issuers who are still "reigning terror" on the card holders. This could be a good news for many card holders who have seen their credit card rates and terms changing adversely after the new rules were declared.

If the new credit card rules become effective from December 1st, then consumers won't be able to charge over their credit limits for the holiday shopping. Also, it won't result into higher interest rates in January, 2010. Apart from this, it'll also prevent the under-21 crowd from opening retail store credit cards as they visit the malls during December.

The effects of the new CARD Act will depend upon the type of credit card you have. Let's take a look at some of them:

Balance Transfer cards - In case of balance transfer cards, the consumers were offered a 0%, 1% or 2 % interest rate for much more than a year. This will become a thing of the past with the coming up of the CARD Act. The rates will be quite higher because the ability to adjust rates on outstanding balances has been limited by the new act. Card issuers won't be able to do anything with the existing accounts. Thus, they would charge higher rates of interest on new accounts to make up for lost revenue.

Debit Cards - These cards have never been that profitable for banks. However, with the coming up of the new rules, new customers will not be allowed to overdraft using their debit cards. If they want to do so, they will have to opt in advance. Overdraft fee income had been a big profit center for banks which they will lose with the coming of the new act. In order to make up the lost revenue, many banks may start charging annual fees for debit cards which can range somewhere between $20 to $30.

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Seany, that was a self-serving, meaningless plug for whoever "afs" is. Please refrain from posting advertisements. Please also review the posting guidelines for this community. Thanks.