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Congress passed a credit card reform bill yesterday, the Credit CARD Act of 2009. While it didn’t include a cap on interest rates, it did offer some protections for consumers. Here are some of the highlights of the credit card reform bill:
- New rules for applying credit card payments. First of all, Congress standardized the deadline for credit card payments to 5 p.m. on the due date. Credit card companies can no longer charge late fees by stipulating that the payment has to be there by 2 p.m., or that the company received payment, but didn’t open the envelope until the next day. Additionally, credit card companies now have to apply payment to the debt with the highest interest. This means that if your card has a balance with a promo rate and a balance with a higher rate, the card company has to put your payment toward the higher-rate balance first.
- “Opt in” for over the limit charges. Credit card issuers love letting you go over the limit. Every time it happens, you are charged a fee. Now, though, credit card companies have to have your permission to do this. You will have to “opt in” to this type of program.
- 45 days are required for changes to credit card terms. This is very helpful. No more retroactively changing terms, and no more term changes without notice. You will have 45 days to decide whether you want to accept the changes — and to use your rewards before they disappear (should that be the change).
There are some other changes, such as no more universal default, and a change in the age that someone can get a credit card without a co-signer. Also of concern is what will happen between now and February, when the changes take effect. Will credit card companies try to stick it to consumers between now and then?
What do you think of the new credit card reforms?
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