In May of 2009, the Ough. S. Congress passed the Credit Greeting card Accountability, Responsibility and Disclosure (or Credit score CARD) Act. While certainly not exactly what consumer advocates have wanted, this new law offers numerous valuable safeguards for credit card customers. In this article I will briefly highlight several key aspects of this important consumer protection legislation. Restrictions on Interest Rate Increases This new law will prohibit credit card issuers from raising your interest rate in your existing balances unless you are 60 days late having a payment. (Currently, your interest rate can be raised if you're late with even one payment. ) Furthermore, if your payment is more than 60 days late and also the default interest rate kicks in, the card issuer must lower the actual rate back to the original rate once you have made six consecutive months of on-time obligations. This means that even if you need to do get behind on your payments and be subject
to a high default rate of interest, you will now have the opportunity and also the right to get your lower price back. Another new restriction relates to promotional rates of interest, which now must remain in location for at least six months before they may be increased. Furthermore, according to the brand new regulations, the regular interest rate on credit cards cannot be increased during the very first 12 months. New Limitations on Various Fees The new law also places numerous limitations on various types of charge card fees, most notably on over restrict fees. Under the new regulations you won't be subject to over limit fees if you don't agree to "opt in" and allow over limit transactions in your account. If you choose not to permit them, then any transaction that would putyou over your borrowing limit would simply be denied. Additionally, card companies won't be able to charge consumers to make payments by phone or on the internet (but they can impose a fee on consumer
s who desire expedited payments). How Payments Are Applied Good news for consumers is how the new legislation requires that any quantity a consumer pays above his/her monthly minimum payment must first be reproduced to the highest interest rate stability. Presently, most credit card companies apply payments first towards the lowest rate balances and then towards the higher rate balances, a practice which costs consumers more income. Special Restrictions for Consumers under Age 21One somewhat controversial part of this legislation is the portion which restricts charge card access for those under 21 years old. Consumers under 21 would be able to obtain a credit card only if they can prove they've "independent means" to repay the financial obligations they incur, or if they could possibly get a co-signer aged 21 or old. While the intention of this provision would be to protect younger consumers, there are some who question this specific approach to doing so. The preceding are j
ust some of the changes that the Credit CARD Act brings about. Most of the new regulations are scheduled to consider effect in February 2010, but you will find currently some efforts under way to alter the effective date to December '09.
What you don't know about credit could be costing you 1000s of dollars each year! Learn more about credit repair and debt management by becoming a member of our FREE Credit score and Debt e-course, or by visiting our site at http: //www. creditndebthelp. com
View this post on my blog: http://creditcard.valuegov.com/the-credit-card-act-of-2009-good-news-for-consumers/
to a high default rate of interest, you will now have the opportunity and also the right to get your lower price back. Another new restriction relates to promotional rates of interest, which now must remain in location for at least six months before they may be increased. Furthermore, according to the brand new regulations, the regular interest rate on credit cards cannot be increased during the very first 12 months. New Limitations on Various Fees The new law also places numerous limitations on various types of charge card fees, most notably on over restrict fees. Under the new regulations you won't be subject to over limit fees if you don't agree to "opt in" and allow over limit transactions in your account. If you choose not to permit them, then any transaction that would putyou over your borrowing limit would simply be denied. Additionally, card companies won't be able to charge consumers to make payments by phone or on the internet (but they can impose a fee on consumer
s who desire expedited payments). How Payments Are Applied Good news for consumers is how the new legislation requires that any quantity a consumer pays above his/her monthly minimum payment must first be reproduced to the highest interest rate stability. Presently, most credit card companies apply payments first towards the lowest rate balances and then towards the higher rate balances, a practice which costs consumers more income. Special Restrictions for Consumers under Age 21One somewhat controversial part of this legislation is the portion which restricts charge card access for those under 21 years old. Consumers under 21 would be able to obtain a credit card only if they can prove they've "independent means" to repay the financial obligations they incur, or if they could possibly get a co-signer aged 21 or old. While the intention of this provision would be to protect younger consumers, there are some who question this specific approach to doing so. The preceding are j
ust some of the changes that the Credit CARD Act brings about. Most of the new regulations are scheduled to consider effect in February 2010, but you will find currently some efforts under way to alter the effective date to December '09.
What you don't know about credit could be costing you 1000s of dollars each year! Learn more about credit repair and debt management by becoming a member of our FREE Credit score and Debt e-course, or by visiting our site at http: //www. creditndebthelp. com
View this post on my blog: http://creditcard.valuegov.com/the-credit-card-act-of-2009-good-news-for-consumers/
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