We have all heard the news about new credit card legislation coming into affect, but few know what it really means to them. Basically the Credit Card Accountability, Responsibility, and Disclosure Act has 13 mandates that will be phased in over the next year.
As of August 2009:
Statements must be mailed 21 days before your bill is due. Previously the statement only had to be mailed 14 days ahead of time.
Credit Card companies have to give 45 days notice before increasing rates and/or fees. Previously it was only 15 days.
As of February 2010:
Issuers can no longer raise rates on an existing balance unless payment is more than 60 days late or a teaser rate expires.
Teaser rates must be in effect for a minimum of 6 months.
Except for initial teaser rates, the rate charged on new purchases cannot be raised in the first year.
Payments in excess of the minimum owed must first be applied to the balance with the highest interest rate and then to the other balances in descending order. Previously payments were usually applied to balances with lowest rates first.
Over limit fees can be applied only if the consumer agrees that they be allowed to go over the credit limit.
Applicants under 21 must have an adult co-sign or show proof of income for approval.
Issuers cannot offer sign up gifts on or near college campuses.
Issuers are no longer allowed to raise your rates on the present account if they learn that you were late on another account.
Issuers must indicate on your statement how long it will take to pay off a balance and the total cost you will be paying if you make only the minimum payments.
In calculating finance charges, credit card companies cannot average in daily balances from the previous billing cycle.
As of August 2010:
Cardholders who are assessed a higher annual percentage rate for a late payment can reclaim the lower rate if they pay on time for six consecutive months.
As of August 2009:
Statements must be mailed 21 days before your bill is due. Previously the statement only had to be mailed 14 days ahead of time.
Credit Card companies have to give 45 days notice before increasing rates and/or fees. Previously it was only 15 days.
As of February 2010:
Issuers can no longer raise rates on an existing balance unless payment is more than 60 days late or a teaser rate expires.
Teaser rates must be in effect for a minimum of 6 months.
Except for initial teaser rates, the rate charged on new purchases cannot be raised in the first year.
Payments in excess of the minimum owed must first be applied to the balance with the highest interest rate and then to the other balances in descending order. Previously payments were usually applied to balances with lowest rates first.
Over limit fees can be applied only if the consumer agrees that they be allowed to go over the credit limit.
Applicants under 21 must have an adult co-sign or show proof of income for approval.
Issuers cannot offer sign up gifts on or near college campuses.
Issuers are no longer allowed to raise your rates on the present account if they learn that you were late on another account.
Issuers must indicate on your statement how long it will take to pay off a balance and the total cost you will be paying if you make only the minimum payments.
In calculating finance charges, credit card companies cannot average in daily balances from the previous billing cycle.
As of August 2010:
Cardholders who are assessed a higher annual percentage rate for a late payment can reclaim the lower rate if they pay on time for six consecutive months.