The New Credit Card Regulations
New rules governing credit card companies came into effect on Monday February 22, 2010. The new laws offer some increased consumer protection. Under the new regulations,
Companies must inform Cardholders:
- 45 days before any rate or fee increase or other significant change to the terms of your agreement.
- the number of months it would take to pay off your balance if you only pay the minimum amount due.
- the monthly payment due in order to pay off the balance within three years.
Additional rules regarding rates and fees:
- No interest rate increase for the first 12 months after a new account is opened.
- Any interest rate increase thereafter can be applied only to new charges, not prior balances.
- You must opt-in for over-the-limit transactions. If you haven’t opted-in and an over-the-limit charge goes through, you cannot be assessed an additional fee.
- Fees, such as annual or application fees cannot exceed 25% of your initial credit limit.
- Applicants under the age of 21 must show ability to meet payments or a co-signer is required.
Billing and Payment Changes:
- Bills must be mailed or delivered no less than 21 days prior to the payment due date.
- Your due date must fall on the same date each month.
- Payments made in excess of the minimum amount due must be applied to the balance with the highest interest rate.
- Interest charges can only be assessed on the current billing cycle balances.
There are some exceptions to these rules, so be sure to read the bulletin from the Federal Reserve website.
Also, you may want to listen to the NPR Weekend Edition story, What You Need To Know About New Credit Card Rules which aired on Sunday, February 21, 2010.
Photo of the Boston Federal Reserve Bank (cc) from graysky and republished here under a Creative Commons license. Some rights reserved.
Filed under: Consumer Protection, Credit, Legal issues 
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