The new law and regulations governing credit cards is going into effect, and it's something that everybody with credit cards needs to be aware of! Visit the Treasury Department's handy website: www.helpwithmybank.gov for a useful and easy guide. But here are some highlights that you need to be aware of:
Banks are going to be raising the interest rate on your credit card. They will send you a notice, usually saying that the interest rate will kick in in 15 days. [YOU need to know that this interest rate will only affect new purchases after the 15 days date IF you REFUSE the increase and choose to pay off your balance at the old rate!! But you have to be proactive and register your refusal.]**This may be an error! The Boston Globe article specifically said this, but I cannot find anything on any of the websites or in the text of the Federal Register (yet!) to verify this statement If it's a mistake, my apologies, folks. I will finish correcting as soon as I finish reading through the Federal Register!
Penalty rates for late payments are going to go way up!! Generally, banks can't change the rates on existing balances, UNLESS you are 60 days late or more paying the balance off! Then they can come at you with a penalty interest rate as high as 29.99% or higher!!
The law was designed overall to protect consumers, so it's ironic that there are these surprise provisions to warn you about. From the Treasury's website, helpwithmybank.gov (the Treasury's site is more helpful than the Federal Reserve's link, but look at both if you have questions about credit cards.
The Credit Card Accountability, Responsibility and Disclosure Act of 2009 (also known as the Credit CARD Act) for credit card companies will result in new credit card policies and protections for you. Effective February 22, 2010 there will be new rules for rates, fees, and payment due dates. The new law also provides protections for consumers under age 21.
The Federal Reserve has prepared a brochure titled: What You Need To Know: New Credit Card Rules, that highlights the key changes.
You can view and print the pamphlet at the following link:http://www.federalreserve.gov/consumerinfo/wyntk/creditcardrules.htm.
An even more helpful website than either government site is the Credit.com site.
They summarize the new law and regulations in plain language and make it very accessible. The nice thing is that it is written from the consumer point of view, which is different from the government sites. The site has lots of other helpful information about consumer and credit concerns. Links are at the bottom of each page. The site seems very credible, consistently rating number 7 in lists of top 20 or top ten financial websites from places like CNNMoney.com or FastCompany.com or even number 6 at Finovate's list. It claims 15 years of experience and a large professional and experienced staff.
Wikipedia (at least as it appears on 7/13/11) contains an excellent summary of the law as well, including the controversial addition of an unrelated rider that prevents the Secretary of the Interior from prohibiting citizens to possess firearms in any National Park. The entry is excellent for including links to websites providing full text of the statute, versions of the bill, and regulations that are related to the bill. The list of related regulations includes some that are not linked on the Internet, very complete.
The image is courtesy of http://blogs.dallasobserver.com/unfairpark/2011/03/dallas-fort_worth_deep_in_cred.php