Credit Card Laws Change this Month

This is a heads up for people with credit cards. On the 22nd of this month (February) credit card laws will undergo major changes. Thanks to the Credit Card Act passed by Congress last year, credit card laws have been drastically changed. Credit card companies have been forced by the congressional act to change their lending practices and the manner in which they can charge fees, and the due date is the 22nd. Here are a few ways that you might be impacted by the Act.



The Good News:

Banks have lost some of their proverbial teeth. Thanks to the passage of the bill, credit card companies can no longer:

• Charge interest on fees due


• Limit the amount that banks can charge on specific fees (such as late fees and over limit fees)


• If you get pre-approved by a company for a new credit card but you don't want to open a new account for it, you now have the ability to "reject the card" up until you activate the card


• Banks must give you 45 days notice in advance if they want either raise the APR on your accounts


• And more

The Bad News:

Credit Card Companies are trying to grow new teeth to replace the ones that they have lost. Companies are looking to charge new fees for their services to make up for any lost revenue. Here are a few known tricks that will soon be making an appearance:

• Annual fees are on the rise


• The interest rates placed on cards are expected to rise as card companies try to find new ways to make up for their lost revenue


• Chase changed balance transfer fees from 3% interest to 5%


• Bank of America instituted a great deal of changes, including the ability to raise the APR on future accounts if you miss a payment (go here for a more in-depth review of BoA's changes)

Keep A Watch Out:

The most important thing to get out of this is that you, the consumer, are now more protected than ever before. Banks now have to give you a heads up on policy changes, rate increases, etc... something that they did not have to do in all cases before. As long as you pay attention to your monthly statements released by your credit card companies and any email notification that you recieve from then, you should be well ahead of the curve. Good luck!

Related Links:

The Credit Card Act in PDF format is linked here

A Forbes article changes that you can expect to see as a result of the Credit Card Act: Forbes Article