Monday, November 30, 2009
What to Expect As New Rules on Credit Cards Take Effect
Post by Lingxiao Li
Credit-card users get new protections this week, the first of a series of federal actions that constrain card issuers from changing terms on customers.
Starting Thursday, banks must comply with parts of the recently passed Credit Card Act of 2009 by mailing bills at least 21 days before their due dates and providing at least 45 days' notice before making a significant change to their rates or fees. Currently, banks are generally required to mail billing statements at least 14 days in advance and provide a 15-day notice of altered fees or rates. The new rules also will bar banks from increasing fees and rates without warning when a consumer misses a payment or exceeds a credit limit.
Consumers also will be allowed to avoid future interest-rate increases and pay off any outstanding balance over time under the original rate terms. Currently, if a consumer gets hit with a penalty rate, for example, they aren't given the option to reject the rates.
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