The Credit Card Accountability, Responsibility, and Disclosure Act will go into effect in phases over the next year and here's what it means for you:
As of August 2009
1. Statements must be mailed 21 days before the bill is due (the current time limit is 14 days)
2. Issuers have to give 45 days notice for a change in interest rate (current is 15 days)
As of February 2010
3. Issuers can no longer raise the interest rate on an existing balance, unless the balance is more then 60 days late or a teaser rate expires.
4. Teasers rates must be in effect for at least six months.
5. Except for expiring teaser rates, the rate on new purchases cannot be hiked for the first year.
6. Payments in excess of the minimum owed must first be applied to the balance with the highest interest rate,and then to other balances in descending order.
7. Over limit fees may only be applied if the consumer opts in for approval on going over the credit limit.
8. Applicants under the age of 21 must have an adult co sign , or show proof of income for approval.
9. Issuers cannot offer free sign up gifts near college campuses.
10. Issuers can no longer practice "universal default" that is raise your rates if they learn you were late on another account.
11. Issuers must indicate on statements how long it will take to pay off a balance if the minimum payments are made.
12. In calculating finance charges, issuers cannot average in daily balances from the previous billing cycle.
As of August 2010
13. Cardholders assessed a penalty APR for late payments can reclaim the lower rate if they pay on time for six consecutive months.
This good news, but watch for credit card companies really trying to sock to you for as long as they can. In the long run this will be a great thing and should help people from heading down the road to bankruptcy.
As of August 2009
1. Statements must be mailed 21 days before the bill is due (the current time limit is 14 days)
2. Issuers have to give 45 days notice for a change in interest rate (current is 15 days)
As of February 2010
3. Issuers can no longer raise the interest rate on an existing balance, unless the balance is more then 60 days late or a teaser rate expires.
4. Teasers rates must be in effect for at least six months.
5. Except for expiring teaser rates, the rate on new purchases cannot be hiked for the first year.
6. Payments in excess of the minimum owed must first be applied to the balance with the highest interest rate,and then to other balances in descending order.
7. Over limit fees may only be applied if the consumer opts in for approval on going over the credit limit.
8. Applicants under the age of 21 must have an adult co sign , or show proof of income for approval.
9. Issuers cannot offer free sign up gifts near college campuses.
10. Issuers can no longer practice "universal default" that is raise your rates if they learn you were late on another account.
11. Issuers must indicate on statements how long it will take to pay off a balance if the minimum payments are made.
12. In calculating finance charges, issuers cannot average in daily balances from the previous billing cycle.
As of August 2010
13. Cardholders assessed a penalty APR for late payments can reclaim the lower rate if they pay on time for six consecutive months.
This good news, but watch for credit card companies really trying to sock to you for as long as they can. In the long run this will be a great thing and should help people from heading down the road to bankruptcy.
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