Credit Card Regulations Changed

Immediately, several new federal regulations on credit card issuers become effective, including:

• Creditors will be allowed to avoid future interest-rate increases and pay off any outstanding balance over time under the original rate terms.
• Bills must be mailed at least 21 days before their due dates and provide at least 45 days’ notice before making a significant change to their rates or fees. Currently, banks are generally required to mail billing statements at least 14 days in advance and provide a 15-day notice of altered fees or rates.
• Banks no longer allowed to increase fees and rates without warning when a consumer misses a payment or exceeds a credit limit.

NOTE:  To work around these changes, credit card issuers such as Bank of America Corp., J.P. Morgan Chase & Co.’s Chase Card Services and Discover Financial Services, recently converted customers’ fixed rates to variable ones. This makes it easier to increase rates without notifying customers.

According to the Wall Street Journal, “The bulk of the legislation’s key provisions will take effect in February 2010, including limits on interest-rate increases on existing balances. The following July will see the introduction of new disclosure rules, drafted and approved by the Federal Reserve Board and other banking regulators.”

If you are struggling to pay your credit cards (or any debts) consider a credit card/debt counseling session with myself or my law partner, Rick Mitchell.