For the many of you who might use your credit cards more than others, you might notice some of the rules will change for the credit card companies. Previous to May of this year, some credit card companies might have been promoting some not-so-awesome policies toward card holders. However, Congress and the current administration pushed through the Credit Cardholder’s Bill of Rights Act of 2009, which by law has ended many of these foul practices by credit card companies.
Which kinds of practices would the act prohibit? The list is quite lengthy. Thankfully you have me to outline them.
First and foremost, the act reforms some of the credit card companies’ interest rates abilities. For example, under the act, credit card companies are no longer allowed to require cardholders to pay interest on already-paid balances. They are also not allowed to increase cardholders’ rates for the first twelve months of a card’s use, and any promotional rates must stay in effect for six months. Once the company decides to increase a cardholder’s rates, the company must inform the cardholder forty-five days in advance, but the increased rates will not be applied to previous balance – only current and future ones.
Secondly, the act reforms payment details. For example, if a cardholder makes a payment above the minimum, the bank will subtract this amount from the cardholder’s balance with the highest interest rate on it, ultimately decreasing the amount of money the cardholder owes. Also, the act gets rid of fees for online bill payment, and also makes payments due at the same time every month.
Thirdly, the rules for the over-the-limit fees have been changed. Only one over-the-limit fee is allowed per month under the new rules, and if a cardholder’s balance remains over the limit during the next payment cycle, he or she will not be charged unless another transaction is made.
Fourthly, the act alters billing statements and payment processes. The act requires that all balance statements must be sent to the cardholder 21 days before the due date, and payments received before 5 pm on the due date are considered on time, unless the date is a holiday. In which case, the payment would be due the day after.
There are many more rules, but these are the ones that stand out the most, and they will go into effect in 2010.