Important Information You Need to Know!
What is the Purpose of this Legislation?
How Will It Help Consumers?
- Card Issuers cannot change the rate on a delinquent balance until at least 60 days past due.
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Issuers can’t raise rates for at least 1 year on a new account, and promotional rates can’t be adjusted for at least 6 months.
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Credit card statements must be sent 21 days before the due date.
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No more overlimit fees unless the customer has agreed to that feature when opening up a new account.
How Will it Help Consumers?
- Cardholders must get at least 45 days notice in writing if terms on the account will change. Currently, it is 15 days.
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All gift cards must have at least a 5 year life.
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For consumers under 21, an issuer must get the signature of a parent or another party who will be responsible for the debt, or obtain proof that the young consumer can repay the debt.
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Payments above the minimum required monthly, will be applied first to the balance with the highest rate.
What You Need to Be Aware Of
Before February, 2010, when the Act becomes law:
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Card Issuers will change cards with fixed rates to variable rates
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Incentive programs will be scaled back.
- Credit limits will be managed more aggressively and late payments will dealt with harshly.
- Issuers will include provisions in new account disclosures to charge overlimit and other fees.
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You may be charged if you transfer a balance from one credit card to another.
What You Should Do Right Now:
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Inspect your credit card statements closely and make sure to read the fine print.
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Scan your bill and see if any fee increases or changes in the interest rate you are currently paying are forthcoming.
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Shop around for products that offer fixed vs. variable rates. Bankrate.com is a good website to choose for that purpose.
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Pay off balances every month and don’t get on the “revolving” merry-go-round.