Important Credit Card Regulations

Here Are Some Important Credit Card Regulations That Many Consumers Are Unaware Of:

The Credit CARD Act of 2009 introduced many important rules to the Credit Card Industry. Because the act took very long to implement and had so many rules, I’ve found that many consumers aren’t aware of these new laws. Here are some key changes:

•Creditors must give you a 45 day warning before hiking up interest rates on your credit card (unless a zero % interest rate offer is expiring).

•Consumers must have 21 days to review statements before their due date. Creditors must send the statements out 3 weeks prior to their due date. This used to be 14 days before the act.

•Fees charged for going over the card limit will be a choice by the consumer. Consumers will have the option to pay extra fees if they charge over the limit. If they opt out of this choice over the limit charges will be declined.

•If you miss payments directly with a creditor the card issuer may only impose a retroactive rate increase if you are late on payments for 60 days with the card issuer themselves. If the payments are made on time moving forward the creditor must reduce the interest rate in no later than 6 months.

•Universal default is no longer allowed. This was the practice of other creditors using retroactive rate increases when they see late payment on other accounts. However, what they can do is close your account, lower your credit limit, or increase your interest rate on future purchases.

•Creditors have to give you 30 days notice if they are going to close your account.

•Adults under 21 cannot get a credit limit greater than $500 or 20% of their annual income, and college students may not be offered incentives to sign up for a credit card.

•Creditors cannot charge an extra fee for consumers to make payments by web or by phone; unless you are making a payment on the day it is due or on the day before and need expedited service.

•Many fees on Gift Cards and Stored Value Cards have been banned, and gift cards cannot expire in less than five years.