Credit Card Reform – How It Will Help You

After the major crash of the credit industry in recent months, steps are being taken to help consumers get a fairer shake in the changes affecting the overall credit industry. New policy and legislative changes are going into effect to protect credit card users from the unfair tactics card issuers have been using to raise interest rates, lower credit limits, and even close accounts without justification. Some credit card companies are infamous for such tactics, and specifically because of these tactics many people are wary about signing up for any new credit card or even using one they have currently.

What Will Change?

The Credit Card Reform Act will bring with it many changes to the way credit card companies handle your account and your business. First of all, credit card companies will no longer be allowed to surprise you by suddenly raising your interest rates. They will have to get you at least 45 days notice before changing your interest rate or making any other significant change to your account.  You will now also have 21 days between the time your statement is sent out before your payment is due. This time was originally 14 days, so this specific element is a significant change.

Now, in the first year that your account is open, the company will not be allowed to raise your interest rate unless it was specifically spelled out in the contract. This will save people the trouble of being surprised by suddenly raised rates after you just receiving the card.  Card issuers will also not be allowed to raise rates on existing balances if the person has been paying their bill on time. This can save you a lot of trouble.  All of these changes will help the average credit card holder in big ways. Now, instead of having to face large rate hikes, you will have the right to cancel your card and switch to a new card issuer in advance of the increased interest rates. Many people didn’t have this option before, and were simply forced to pay higher interest rates.

The Credit Card Reform legislation is being closely monitored by regulators and the Federal Reserve. This is to insure that banks follow the terms of the new laws. Because most credit cards are issued by the major banks in the US, it is likely that most people will not have a problem with these terms going into effect. If you need to, ask your credit card provider about the new legislation and how it will affect you.

The bottom line is that the new Reform Act should end up saving you a ton of money in the future.

Related Posts:

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• Swipe Fee Reform Coming Soon - Retailers and credit card issuers have long debated the ‘swipe fees’ that should be paid by users for the privilege of using...
• Getting a Better Interest Rate - Now that Congress has recently enacted the Credit Card Reform Bill, certain credit card issuers are hastily trying to get their last...
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This entry was posted on Saturday, August 22nd, 2009 at 3:38 pm and is filed under Card Security, Debt & Consolidation, Tips & Advice. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.