So now we know exactly what the changes will be with the new Credit Card Reform Act now signed into law. We also know that it will take about nine months before the new laws kick in. The relief that these new laws will bring to consumers isn’t exactly going to happen overnight but at least it is a little bit quicker than the Federal Reserve regulations that are not set to go into effect in July 2010.
Lets talk a little bit about what these new regulations will mean to us, the consumer. First off, be warned. The credit card companies are a pretty crafty lot so expect to see some new fees that are not covered by this law. No doubt loopholes will be exploited and new ways to bilk revenue from cardholders will be created.
But let us focus on the good news. Credit card companies will be required to give 45 days advance notice before raising your interest rates. The credit card companies will also be required to accept payment through not only the mail, but also the Internet and telephone…. and they cannot charge any type of “convenience fee” for it.
The archaic rule that credit card companies would only accept payment between certain hours of the day will be wiped out. Quite simply, if your payment arrives by 5 p.m. on the date in which it is due, then it must be accepted as such. Credit card issuers will still be allowed to offer promotional rates but they must last for at least six months and interest rates cannot be raised within the first year of opening the account.
You will no longer be subjected to fine print that is virtually unreadable on your credit card statements. The print must be in 12 point type or larger. The credit card companies will no longer be able to immediately penalize you with higher rates if you’re late making a payment, but must wait 60 days before raising your interest rates.
And for those consumers that fall 60 days and beyond in making your payments, you can have your previous interest rates restored if you pay at least your minimum payments on time for six consecutive months. It will also become more difficult for individuals under the age of 21 to open up a credit card account without first having to prove they have the means to repay their debts or can get a parent to cosign with them.
Well there it is ladies and gentlemen. For better or worse that is the credit card reform legislation in a nutshell. You can bet politicians that are facing tough reelections such as Christopher Dodd of Connecticut will be jumping up and down patting themselves on the back while exclaiming how wonderful they are for finally doing something.