Credit Card Bill Of Rights
Credit card issuers will have new rules when the Credit Card Bill of Rights goes into effect. As such, some companies are trying to get their rate increases passed before certain components of the law go into effect.
With the economic downturn still in effect, many people are having trouble keeping up with their credit card payments. Some credit card issuers are taking advantage of missed or late payments to increase their customer’s credit card interest rates. President Obama signed into law the Credit Card Bill of Rights to try to protect consumers from some of these practices.
Some of the components of the Credit Card Bill of Rights include:
- Forces credit card companies to be accountable, and transparent in their business
- Prohibits companies from giving cards to people under 21 unless they can prove they have the means to pay the debt or a parent or guardian co-signs
- A customer also will have to be more than 60 days behind on a payment before seeing a rate increase on an existing balance
- Consumers also will have to receive 45 days' notice and an explanation before their interest rates increase
- Requires promotional rates to last at least 6 months
- Creditors are required to review previous credit card interest rate increases to see if circumstances have changed and lower your interest rate accordingly
- Creditors will no longer be allowed to increase interest rates within the first year of an account's opening, unless you’ve defaulted on the account, you have a variable interest rate, your hardship arrangement has ended, or the promotional rate has ended
- Interest rate increases cannot apply to existing balances
- No more double billing cycle finance charges
- Limited fees for subprime credit cards
- Billing statements must be send 21 days before payment due date
- Credit card payments received by 5:00 pm on the due date are on time
- Payments received the next business day after a weekend or holiday are considered to be on time
- Payments above the minimum are applied to highest interest rate balances
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