The New Credit Card Rules
The Credit Card Act of 2009 that took affect February 2010

CREDIT CARD RULES THIS YEAR

  1. Interest rates cannot be raised in the first year after an account is opened unless an introductory rate has expired.  Then there is a 45 day notice requirement.  Many of you noticed that banks raised your rates prior to this new law in February, even if you were a good customer in the past.  (They got their digs in.)

  2. For existing balances, rates can’t be raised unless the account is 60 days past due.  If it is and rates are raised, the account holder can restore the original rate by making timely payments for 6 consecutive months.  This provision just went into affect.  (They get you again - There is still no cap on interest rates)

  3. You should have noticed that your statements now show how many months it will take to pay the balance off if you just make minimum payments.  Keep in mind that this timeline assumes no new charges.  Your statement also shows how much needs to be paid per month to pay the balance off in three years, (again, with no new charges).

  4. Service fees such as activation and annual fees will be capped at 25% of the credit limit during the first year of use.  (After that there is no cap.  Also, this doesn’t apply to penalty fees.)

  5. Statement due dates must now be consistent.  Statements must be mailed out 21 days before the due date.

  6. The cardholder must specifically agree to permit transactions that exceed the credit limit.  Only then can over the limit fees be charged.   The O.T.L. fees can’t be triggered by other fees or interest charges. Only one O.T.L. fee can be charged during one billing cycle.  (You may have had pressure tactics applied to make you opt in.) BTW you can revoke it at any time.

  7. Companies can’t raise rates on existing balances.  If rates are raised on new charges, the card holder has the option of cancelling the card and paying down the balance at the old rate.

  8. Students – cards can no longer be issued to anyone under 21 unless they have a co-signer and can show enough income.  Colleges also have to disclose marketing deals with credit card companies.  Banks are no longer allowed to hand out gifts at campuses.

  9. (NOT CREDIT CARD BUT RELATED)  As of the 15th (Last Sunday) if you haven’t opted for overdraft protection with your bank, banks can’t do it automatically.  Therefore, ATM withdrawals and debit card transactions that cause you to be overdrawn will be denied.

To find out more about the new law go to www.federalreserve.gov and click on “What You Need to know: New Credit Card Rules”.

 
 
  

 

  

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