blog home whats my score

Happy New Year, WMSers! So the new credit card laws that got enacted last spring are kicking in soon…Feb 22nd to be exact. They are designed to protect consumers, and below are the highlights.
I like to think of them as my credit cards’ New Year’s Resolutions.
: )

NOTE: Some of these specifically affect consumers under 21, so you spring chickens, take note.

1. Raising interest rates on existing balances will only be allowed in limited circumstances.
Generally speaking, issuers will now only be allowed to raise the interest rate on an EXISTING balance if a promotional rate is expiring or a cardholder is over 60 days late on a payment. Rates typically can’t increase in your first year as cardholder.

2. Credit card issuers need to give you 45 days notice before changing any terms of service.
This one’s already in effect. The old rule was 15 days. But credit limits don’t count. Those can be cut without notice, provided they don’t cause you to owe a fee.

3. Over the limit fees are only allowed if a cardholder opts in.
If you don’t opt in, any purchases that would send you over your credit limit will be rejected at the point of purchase.

4. If you pay more than minimum payment, additional payment applies to balance with HIGHEST rate.
If you carry balances with different rates on a single card, this is good news for you.

5. No double cycle billing. And more time to pay.
In short, issuers can no longer charge interest this month on last month’s interest. Also, cardholders must now have 21 days from the time they receive their bill until their due date, not the current 14 days.

6. Credit cards will be harder to get for consumers under 21.
Unless you can verify an independent source of income or have a co-signer over 21, you will not be approved for a credit card. Also, tighter marketing restrictions mean the days of credit card issuers enticing students on campus with free pizza just for filling out an application are gone. Look on the bright side. It will keep you out of debt and away from those empty calories. Win-win!

Remember, these are just the highlights. To get more details on the new rules, check out these links.
The Credit Card Act of 2009
White House press release
White House blog

by Steve

Leave a Reply

You must be logged in to post a comment.