New Credit Card Rules


There were new credit card rules implemented for the safety of the customer by the federal government on February 22, 2010. Here are some changes mentioned below:

Billing and Payment Changes:

1. The first change that was put into act is that all payments and due dates must be standardized. The due date must be on every month’s same day and all the bills should be sent before 21 days of the due date. The time is also a factor; the companies are not allowed to set due date time before 5:00 pm, so that one can pay the amount if in any case the next day is supposed to be a holiday.

2. Any billing cycle which is more than one month would not be entertained.

3. Payments that have a higher interest rate should be applied to the portion of balance above the minimum payment amount.

New Credit Card Rules for Rates and Fees:

From now on one must chose to allow the transaction to go through which will make you cross your credit limit, that always ends in over-the-limit fee.

There will no changes what so ever in the department of interest for at least one year, until and unless you default on your monthly payments.

It has to be a new charge to apply an increase in interest rate; however the credit card companies will not be able to apply any new interest rate to the balance which is there from earlier days. Before authorizing the card if any applicant is minor or below 21 years then the applicant will have to prove the ability to repay.
The application or annual fees of a credit card cannot be more than 25% of the initial credit limit.

New Rules Regarding Interest Rate and Fee Changes:

For now on, credit card companies must tell you:

• 45 days in advance if they plan to change your interest rate or fees, unless you have a variable rate card, your introductory rate expires or you default on your payments. If you do not like the new terms they must give you an option to close your account.

• How long it will take to pay off your balance, this includes how long making the minimum payment and how much you would have to pay to pay off your balance in three years. They must also show you the dollar amount difference between the two. They also have to tell you what your fee would be or changes in terms would be if you paid late.

As you can see, these new credit card rules should make your statements easier to understand and your payment amounts more predictable. The new statements will also make it simpler for you to have a clear view of exactly how long it will take you to pay off a debt and how much interest you will pay whether you just make a minimum payment or pay enough to clear the debt within three years.

For more information visit: