The first installment of Obama's credit card company smackdown is about to start. Soon consumers will be receiving more notice when terms are changed and a chance to reject interest rate increases providing struggling consumers with credit card debt with some relief.
Starting August 20, credit card companies will be required to give customers 45 days advance notice before making major changes to credit card terms and now have to mail bills 21 days before the due date.
The previous laws allowed credit card companies 30 days before changing terms and 14 days to mail bills.
Another interesting option allows consumers to reject changes to their terms, which include interest rate increases and they will now have the option to pay off their balances at their current rate over the next five years.
Rejecting an interest rate increase will cancel the credit card. At the same time taking five years to repay the card can result in a higher minimum payment. At least under the new rules the minimum balance cannot go up more than double.
When the balance is too large to allow the consumer to repay the debt within five years, without doubling the minimum payment, the credit card company is able to make the determination to extend the time frame or determine a new interest rate.
Stay tuned for stage two.
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