The New Credit Card Regulations Became Effective February 22, 2010
You receive information on your credit card terms every year. How many of us read these little pamphlets that come in our statements? The print is usually small and hard to read. It's important to read these documents as they contain information as to what fees the credit card company charges and under what circumstances they impose these fees.
Because of this new legislation, your credit card company now has to give you a 45 day notice of when they want to increase your interest rate. They can only increase the interest rate on your future purchases not on the current balance on your card. Now credit card companies must offer an opt out option. If you decide to opt out, you have five years to pay off the balance on your card and the interest rate on your remaining balance is not increased, stays the same, and can not be changed. This also means that you won't be able to use this particular card anymore.
Credit card companies can no longer give credit cards to anyone under 21 years of age except under certain conditions. They can give a card to someone under 21 if there is a co-signer or if they can prove that they have the means to pay their credit card payments on their own. If credit card companies want to solicit college students directly on college campuses with gifts, they are no longer allowed to do this. They must stay at least 1,000 feet away from college property if they are offering gifts as a bonus for signing up for a credit card.
All of this doesn't mean that credit card companies can't continue to raise rates, they just have to give you notice. Before the legislation went into effect the credit card companies were raising rates at a furious pace. Even for their customers who had never been late and had perfect credit.
If you have a credit card, and you use it, you need to pay off the entire balance when you get the bill. Credit card companies only make money if they can charge you interest or charge you an annual fee to use their card. Some think that because of this legislation we will see more credit card companies giving out credit cards that charge annual fees. If it gets to the point where credit card companies decide to charge everyone an annual fee, is the day that we all should cut up our cards and mail them back to the credit card companies.
Credit cards are dangerous to your financial security. Too many people are sucked into the credit card trap. Remember if you spend more than you can afford there is a penalty. The best thing you can learn to do is live within your means.
There are many more changes enacted and you can check out more information on the credit card changes here.
Sources:
http://www.creditcards.com/credit-card-news/help/credit-card-reform-act-1282.php
http://www.creditcards.com/credit-card-news/help/what-the-new-credit-card-rules-mean-6000.php
Published by Pat Bartels
Previously employed in the Human Resources field, Pat enjoys traveling and tweaking computers when she is not writing articles for Associated Content and Factoidz. She is fascinated with personal finance, th... View profile
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10 Comments
Post a CommentUseful info to know.
Nice overview Pat...I agree with Debra!
Very informative article. We're still getting ripped though.
Credit card companies make money on every single purchase, whether you pay the entire bill or not! They get 2 to 4 percent from each business that uses them, depending upon the size of the business. There is no reason for annual fees! Other than greed, of course.
Very good information, they are still due to watch, they are all abunch of crooks.
No doubt they will figure out how to garner more of our money any way they are permitted to. Thank goodness that the anti-regulation lobby at least had to compromise on this one.
They all are loan sharks like the Sopranos.
Great to have the new laws to protect consumers, but they should have been effective soon. The credit card companies have almost all raised rates considerably in 'preparation'.
Now they have to look for better ways to screw us!
Thanks Pat, I rarely pay attention - I will now! Cheers.