Debt Consolidation

9 New Credit Card Rules That You Must Be Aware Of

As per the new laws in the United States of America, the credit card rules have now changed and have become more favorable for the consumers. Several legal restrictions have been imposed on the companies and they can no more treat you unfairly. Following is a brief rundown on some of the key changes that are effective since February 22, 2010.

The Monthly Statements Must Clearly Disclose The Penalty Of Just Making The Minimum Payments

Most companies allow you the convenience to avoid your actual debt problems and keep moving on by just making the minimum monthly payment, but they never tell you that opting for this convenience can actually turn out to be a very costly affair, as there are several penalty charges involved. As per the new credit card rules, it has now become mandatory for the companies to explain the provisions of such penalties clearly in the billing statements they send to you. This way, now you can have a clear picture on how much additional interest charges you will have to pay and how long it will take you to pay off your debts in full if you keep on making just minimum payments.

If A Company Receives A Payment The Next Business Day After A Holiday Or A Weekend, It Will Not Be Considered As Late Payment

If it is a holiday or a weekend on the due date for a payment, the payment made on the next business day must now be considered as timely payment. No penalty charges or late fee should apply.

You Are Not Crossing The Due Date If You Are Making Payments Before 5 Pm

Though the new credit card rules have set the cutoff time for the companies to accept payments to 5 pm, but no specific time zone has been specified that leaves ample room for confusion. Because of this confusion, you may still be charged a late fee. Therefore, you are strongly recommended not to fall for this rule; it may or may not work in your favor. The best practice is not to wait for the due date; send your payments early.

You Must Receive Your Statement At Least 21 Days Before The Due Date

Earlier, the laws would require companies to send billing statements within a “reasonable time” without bothering to explain what that reasonable time should be. The new credit card rules make it specific by limiting that reasonable time to 21 days before the due date.

Restrictions On Fees Charged On Sub Prime Credit Cards

Earlier there was no limit on how much fees companies could charge on sub prime credit cards, but now with the new rules, the companies are restricted to charge only up to 50% of the credit limit. For those accounts that are open, the companies must charge only up to 25% at a time while the remaining fees must be charged over a period of five billing cycles.

Companies Can No More Charge Interest On The Balance That Has Already Been Paid

If you have already paid certain balance (even if those payments were not in full), you cannot be charged interest on the same in future. Earlier credit card companies were engaged in this type of unfair practices, where they would charge you double for the same balance on various excuses. The practices of such “double billing cycle method” are now strictly prohibited as per the new credit card rules.

Any Increase In Rates Or Charges Must Be Notified To Consumers At Least 45 Days In Advance

Earlier, this time period was limited to only 15 days. But now, before increasing rates or other charges (including fines and penalties), credit card companies must send a notice to their consumers at least 45 days in advance. This way, you get more time now to do your planning on how you are going to deal with the increased rates.

The Increased Rate Will Not Apply To The Existing Balance

It is also important to note that even if the rates and charges are increased, you will continue paying off your existing balance at the earlier rates. Credit card companies can no more increase the rates on your existing balance. The new rates will apply to only those purchases that you make after those rates come into effect.

Companies Cannot Increase The Rates During The First Year Of Your Credit Card

Companies are now also prohibited from increasing the rates for the first twelve months since the date the card is issued. So, there are no more worries of any sudden hike in interest rates at least for the first year. However, the penalty rates can be increased if you delay in making your payments by at least 30 days.

The awareness regarding these new changes in credit card rules is very important if you want to protect you from credit card scams and frauds.


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Posted in Credit Card Debt Consolidation, Debt Consolidation | 1 Comment »

One Response to “9 New Credit Card Rules That You Must Be Aware Of”

  1. Sams says:

    Plastic money is very commonly used in today’s world. Multiple credit cards have become necessity, not a luxury. It is very important to be well aware of credit card rules. There is a very common practice of doing the minimum payments only but it seems to be very bad for you. Because there are many penalty charges you have to pay due to this habit. But the new ruling is that the companies have to mention the penalty charges in their statements. There are some more interesting rules for the companies like the receiving of credit card statement must be done before the due date. Generally companies charge the high rate of interest on your existing balance also but now it is a strict ruling not to charge any interest if you have paid the balance. If company decides to increase the interest rate, new rates will not apply to the existing balance. One more interesting thing is that credit card companies are not liable to increase the interest rate with in the 12 months from the issuing date of credit card. The new rules are very impressive and effective; the success of these rules may differ from person to person

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