New Changes For Credit Cards Could Help You

PALM DESERT – The countdown is on.

Big changes for credit card companies are just days away.

It’s all part of the “Credit Card Accountability, Responsibility, and Disclosure Act” that was signed last year.

“It’s certainly is a protection for consumers,” according to Sheri Stuart, with Springboard, a local non-profit consumer counseling service.

“To be honest, I don’t know how aware the public really is.”

Here is a breakdown.

First off, card issuers will no longer be able to retroactively hike your interest rate, making it much easier to get out of debt.

And if they do increase your interest rate for new purchases, they now have to give you proper notice.

“The credit card companies are required to give consumers forty-five day written notice if they are changing the interest rate, or any other terms and conditions of the contract,” Stuart said.

While forty-five days notice is required before making many changes under the new law, your card can still be closed or your limit lowered without your ok or say in the matter.

The new laws also force card companies to adopt better billing practices.

“There will be no more floating due dates,” according to Stuart. “So your date wont float from say the 17th to the 15th.

If it is due on the 15th, it is always going to be due on the 15th.”

There will be no more midday cutoffs or due dates on weekends or holidays.

And confusing double cycle billing has also been eliminated.

You will notice on your statement there will now be extra information, including how much you need to pay if you want to pay off your balance within three years.

Also an estimate on how long it will take you to pay off your balance if you only make the minimum payment each month.

“We do know that when consumers see a minimum balance due we typically pay the minimum balance, and not really understand or sometimes not really knowing that you’ll end up paying for an item 3 or 4 times more than what it originally cost,” Stuart said.

And watch out for fees!

There are no restrictions on the types of fees that card companies can charge, from dormancy fees to annual fees.

Even a fee to receive a paper statement!

And the last major change under the new laws is more protection for young consumers.

People under 21 cannot be issued a credit card unless they can show proof of reasonable income.

Its estimated one in four people have a mistake on their credit report.

To make sure yours is right you can visit www.annualcreditreport.com

Additional information on consumer counseling is available at www.credit.org.