Will The New Credit Card Law Change Anything?

By Tom Morrison

On August 20, 2010 the credit card accountability, responsibility and disclosure also branded as the Credit Card Act of 2009 goes into affect. The laws are intended to protect consumers from abusive practices by credit card companies. However, it may be a case of too little to late. The laws was passed in Frebruary of this year.. The six-month lag for its enactment gave credit card companies adequate time to modify fees and position themselves before it becomes effective. The law does not address the biggest problems consumers have which is too much debt and it merely may be a government effort to quell public outcry over abusive practices by these companies..

Here is a summary of the new laws key features

• Retroactive rate increases - Issuers must wait for the promotional period to expire in order to raise interest rates. . Cardholders cannot be punished for universal default, anytime or any reason clauses and for non-related accounts. If cardholder is not 60 days delinquent, the bank must reinstate the lower rate when the cardholder shows 6 months of on time payments.
• Notice of Rate Hike - establishes a 45 day period for key contract changes and rate hikes. This is not applicable to credit card limit changes.. The rules don’t put a limit on interest rates. Your APR rate can still triple.
• Fee Restrictions - Issuers cannot charge cardholders an overlimit fee unless they approve the transaction and over limit amount..
• Restrict Credit Cards to under 21 - Those under 21 who can’t prove means of income must have a co-signor 21 or older to get approved.
• Double billing cycle - ends the practice of basing interest charges on the current or previous charges, or double-balance billing.
• Fairer payment allocation - Current payments are applied to lower interest balances first. Now the reverse hold true and must be applied to higher interest rate first.
• More time to pay - The statement must be sent by the credit card company 21 days before payment is due, currently it’s 14.
• Gift Card protections - a 5 minimum expiration of gift cards is mandated.

The new law does provide some protection for the consumer, although it could be argued that it does not go far enough. Furthermore, credit card companies have been raising interest rates, imposing new fees and changing other terms favorable to them in anticipation of the law. As a result the impact of th law will not be as great as had been anticipated.

Article Source: http://interpret.zar.vg

About The Author
This law does not help those that cannot meet their monthly obligation or are having a difficult time with their debt. For them debt relief programs such as debtfreesite.net”>debt consolidation and debtfreesite.net”>debt settlement offer the only real options to be debtfree.