Some of the new credit card rules goes into effect today. I don’t know this will really impact me in my every day life but any new rules will be welcomed b/c the credit card industry has been out of control for too long. Please, read the rules below:
Today the Federal Reserve adopted long-awaited rules to limit some of the most egregious credit card industry practices. Unfortunately, the changes won’t go into effect for about 18 months, on July 1, 2010.
The new rules will protect consumers by:
• Prohibiting credit card companies from raising interest rates on money already borrowed unless it was borrowed on a variable rate card, or the minimum payment is made more than 30 days late.
• Protecting new cardholders by prohibiting interest rate hikes in the first year of an account. The only way interest rates can go up in the first year is if the card issuer disclosed a future rate hike at a preset time when the account was opened.
• Imposing a new rule that "zero interest" really means zero, ending the practice of so-called deferred interest.
• Prohibiting credit card companies from charging a late fee if the cardholder’s bill was mailed out less than 21 days before the due date.
• Requiring that payments be allocated fairly among credit card balances with different interest rates. Payments must either be allocated to the highest interest balance or prorated.
• Prohibiting credit card companies from charging interest on amounts already repaid, through two-cycle billing.
• Restricting the financing of fees on credit cards where the fees or deposits use up the majority of the available credit on the account.
Source: Consumer Reports