Exceptions to the Credit Reform of 2010
Many consumers are excited about the credit reform implemented in July of this year, primarily because it eliminates many of the unfair practices credit card companies have been using to charge higher interest rates and penalties. Unfortunately, this reform didn’t stop credit card companies from jacking up rates, decreasing credit limits, and changing due dates before the new regulations went effect. Even so, the changes made this year are more significant than any incurred in the credit card industry over the last three decades.
The Reform of 2010
The changes were devised and implemented by the Federal Trade Commission in what is known as the FTC Act, which has been approved by regulators from the National Credit Union Administration and the Federal Reserve. The Act has banned many of the unfair practices often seen in the credit card industry, including double-cycle billing. The Act has also set a grace period for repayments, and has improved payment allocation so that repayments go toward the highest interest rate first. Unfortunately, not all consumers will be protected by these new regulations, and the following information covers all of the exceptions to the credit reform act of 2010.
Business Credit Cards
Unfortunately, business credit cards do not count as consumer cards and are therefore not covered under this act. Because commercial cards are defined as any credit or debit cards used for business purposes, even small business owners are not protected under the new laws, and so business owners should expect their credit card terms and conditions to remain the same, at least for the time being.
Some experts predict business owners who frequently use business credit cards will be weary of this within the coming year, as credit card companies may try to recuperate the losses from the consumer reform by charging higher rates and changing the terms of business cards.
Military Personnel at Home
Fortunately, the reform restricted credit card companies from charging exorbitant interest rates to military personnel who are abroad. However, for some mysterious reason, when they return home they are subject to the same rates that were assigned to their accounts before they left. This means that any military personnel who were deployed before the credit reform act was passed will not reap the benefits of the act when they return home.
Reports are that the Federal Trade Commission is expected to fix this oversight, and spokespeople have stated that military personnel will not be subject to unfair credit practices upon their return.
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