For better or for worse Congress will change the way that your credit card company treats you begginning next year.
We’ve had quite a few messages sent into our Dear Danny hotline about the credit card reform bill passed earlier this year. I did a little digging and here are some steps that credit card companies must comply with beginning January 1, 2010.
How the New Credit Card Laws will Effect You
Your due date will no longer be a moving target.
Currently some banks play a shell game with your due date. The new rules mandate that they set a due date and leave it. They will also be required to give you 21 days written notice of your due date, so no more phantom statements arriving at your home with an eminant due date.
They have to allow you to attack high interest lines of credit first.
Another way that this legislation attempts to help is that credit card companies will be forced to apply any payments above your minimum amount to lines with the highest interest rate. This will end another trick these wonderful people play…punishing you for having the audacity to try to pay them back in more quickly.
No more non-punitive interest rate hikes.
Also beginning in 2010, the credit card companies will generally no longer be allowed to jack your rate up on existing balances for no reason. According to the new rules, they can increase your rate on future purchases, but they can not touch your existing balance rate until you are at least 60 days late on a payment. Furthermore, they have to give you 45 days notice before any penalty rate can take effect.
They are not allowed to raise your rate in year 1.
Finally, your credit card company will not be able to change your rate at all within the first year of opening the account. After the first year they will be required to give you 45 days written notice before any changes are allowed.
Caveat Emptor!
With all of this being said, and in spite of the best intention of our Congress, our warning to all of you with cards is this:
The chaos theory reigns when it comes to banks and card issuers. Fees, interest and profit will find a way…after all…the government has never claimed that we the tax payers are too big to fail.
So watch your back and pay off those balances…asap.
