Credit Card Rules
In the recent past, credit cards companies could suddenly increase your interest rates and your 12% interest rate could become a 20% interest rate.
Today, credit card companies must give you 45 days’ notice before raising you interest rates. And if you don’t like the rate increase, you now have the option of canceling the card before the increase goes into effect.
When you sign up for a new card, some credit card companies used to jack up your rate almost immediately after you signed up for that card. Today, no interest rate increases for the first year after you sign up. Increasing the interest rate on items that you paid for under a different rate is unlawful. Rate hikes can only apply to new debt. Those are some of the changes brought about by the Credit Card Accountability, Responsibility, and Disclosure Act of 2009 which Obama signed into law in May of last year, but nobody seemed to noticed.
Recently, the final phase of the Credit Card Act went into effect, by regulating penalty fees that credit card companies can charge you for violations. Now, no fee can be over $25 or of greater value than the violation itself. If you go $10 over your credit card limit, the credit card company can’t fine you $50 for that $10 overcharge. They also can’t charge you an inactivity fee for not using an account and they can‘t penalize you more than once for a single violation.
Credit card reform is one of those things that Obama has done that when people list legislative accomplishments of his presidency, often doesn’t make the list. Politically, the Obama administration might not get much credit for it. He’s not good at getting credit for legislation that congressional Democrats have passed, even when it uniformly affects many Americans in a positive way.
The credit card industry responded to these new rules, by jacking up their interest rates to record heights, which provides an indication into how they operate.
Today, credit card companies must give you 45 days’ notice before raising you interest rates. And if you don’t like the rate increase, you now have the option of canceling the card before the increase goes into effect.
When you sign up for a new card, some credit card companies used to jack up your rate almost immediately after you signed up for that card. Today, no interest rate increases for the first year after you sign up. Increasing the interest rate on items that you paid for under a different rate is unlawful. Rate hikes can only apply to new debt. Those are some of the changes brought about by the Credit Card Accountability, Responsibility, and Disclosure Act of 2009 which Obama signed into law in May of last year, but nobody seemed to noticed.
Recently, the final phase of the Credit Card Act went into effect, by regulating penalty fees that credit card companies can charge you for violations. Now, no fee can be over $25 or of greater value than the violation itself. If you go $10 over your credit card limit, the credit card company can’t fine you $50 for that $10 overcharge. They also can’t charge you an inactivity fee for not using an account and they can‘t penalize you more than once for a single violation.
Credit card reform is one of those things that Obama has done that when people list legislative accomplishments of his presidency, often doesn’t make the list. Politically, the Obama administration might not get much credit for it. He’s not good at getting credit for legislation that congressional Democrats have passed, even when it uniformly affects many Americans in a positive way.
The credit card industry responded to these new rules, by jacking up their interest rates to record heights, which provides an indication into how they operate.
posted by Jim O'Leary | 1:05 AM
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