The law passed by Congress last year overhauling credit card rules has been taking effect in stages.Î¾ There are a lot of new consumer protections, as Kim Lankford, contributing editor with Kiplinger's Personal Finance, explains.
"For example, credit card companies are no longer going to be able to raise your rate on existing balances unless you're more than 60 days late on paying your bill.Î¾ And that's a huge deal, because in the past sometimes they would raise your rate if you were just a little bit late, or they would raise your rate if you were late on another card's payment.Î¾ You're also going to be able to see on your credit statement how much you would have to pay each month to repay the balance on your card in 36 months, because a lot of people who just pay the minimum really don't realize how long and incredibly expensive it can be to spread those payments out over many, many years."Î¾Î¾Î¾
Some credit card companies have already been making changes, knowing this day has been coming.Î¾ Card issuers have been mailing new terms and condition folders with a lot of fine print.
"A lot of people have seen fees increase on their credit cards, whether it's annual fees, inactivity fees.Î¾ As soon as the law was signed, the credit card companies did start to look for other ways to gain revenues.Î¾ And that's where a lot of our readers have been letting us know about a lot of these big fee increases.Î¾ Card companies are getting very creative about other sources of revenue, and the good news is that for the fees, you have a lot more control over it.Î¾ It's not like existing balances, where you had already charged it and then the rate rises.Î¾ So you've gotta read those notices and then decide whether it's worthwhile to keep that account or not."
APR or finance charge increases are banned during the first year of an account, and due dates must be the same each month.