New Laws Impact Your Credit Card Account in 2010
Officials in Washington recently enacted new credit card laws to ensure better transparency regarding card terms, fees, and interest rates, and under this new legislation known as the CARD Act, consumer protection will begin to increase in 2010 – starting February 22nd.
Already millions of cardholders have gotten notices from their credit card companies to inform them of changes that will start to show up on their monthly statements. Among those charges are new statements that are formatted in such a way that the print is larger and easier to read – to eliminate hiding of details in the small print. Payments will be due on the same day each month, and if you make an extra payment on your credit card account it will automatically be applied to the balance that carries the highest annual percentage rate or APR. In the past card companies applied such credits to the lowest APR balance as a way to increase profits at the expense of the consumer.
Under the new CARD Act rules, your card’s interest rate will generally only go up if your promotional rate expires, the account has a variable or adjustable rate and prevailing rates such as the prime rate rise, or if you fail to make a payment on your account for more than 60 days. Even in cases where your rate is going to be raised due to non-payment you will be notified in writing ahead of time. Meanwhile rates on new balances will not go up for the first year that you have your card account – unless the kinds of stipulations outlined above come into play.
Other consumer protection policies being enacted as a result of the CARD Act and new credit card laws include the introduction of more budget management tools to help the cardholder figure out how to better handle their finances. All of the changes under the CARD Act are good news for consumers, despite the fact that many consumer protection groups still think that Congress should have gone even farther in terms of enacting controls on what card companies can get away with as they try to profit from their customers.
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