Скачать или смотреть New Credit Card Law Takes Effect

http://www.cambridge-credit.org -- Transcription: The Credit Card Accountability Responsibility and Disclosure Act, or CARD Act, of 2009 has literally changed the credit card game for all of us. The Act is the most comprehensive credit card reform legislation that has ever been enacted and strives to establish fair and transparent creditor practices. While some of the provisions have already gone into effect, several more important changes are set to take place on February 22, 2010.

The most significant provision of the law limits when credit card issuers can increase interest rates on existing card balances, commonly referred to as retroactive rate increases. There are, however, instances when retroactive interest rate hikes will still be permissible. These involve consumers who have received an introductory rate that is expiring, when the interest rate is tied to a variable index, or when the cardholder’s payment is more than 60 days late.

Even if an individual’s payment is 60 days or more past due, they can expect an interest rate increase, but the new Act doesn’t allow the consumer to be penalized for an inordinate amount of time. Credit card issuers must now restore an individual's original interest rate after a late payment, providing that he or she has made on-time payments during the six-month period following the increase. Should the individual get back on track for six consecutive months, the interest rate must be reduced to the prior level.

Another fantastic provision of the CARD Act is the elimination of the practice known as universal default. Universal default policies allowed a credit card issuer to increase its interest rate when you made late payments on completely unrelated accounts, such as utilities, competitor credit cards, or any other line of credit.

Creditors will also be required to provide an explanation as to how making only minimum payments will increase the amount of time needed to pay off your debt. Understandably, the economic circumstances in our country have made things difficult for many cardholders, and making minimum payments can be a very tempting option. However, doing so can cost you thousands of additional dollars in interest if making minimum payments becomes a habit.

In the same spirit of such disclosures, credit card companies must now provide you with 45 days’ advance notice of significant changes in the terms and conditions of your agreement. Such changes include actions related to proposed interest rate increases and any fees that may be assessed. You’ll have the option of rejecting such increases, closing your account, and paying off the balance at your old rate. Unfortunately, given the loss of the open line of credit and the detrimental effect that closing your account might have on your credit score, this is not such a great option, but it’s better than nothing, which was the former alternative.

The way the credit card companies apply payments will change as well. Beginning on the 22nd, payments beyond the minimum must first be applied to the balance with the highest interest rate. Also changing on the 22nd is the way creditors are able to establish due dates. Going forward, due dates for monthly payments must be the same day each month. Should that day fall on a weekend or holiday, payments will be credited to the account on the next business day, without any penalties.

Over-limit fees are being overhauled as well. Beginning on the 22nd, consumers must be given the option to opt in to over-limit fees. Such fees are incurred when an individual attempts to make a purchase that exceeds their credit limit. By agreeing to incur over-limit fees, an individual ensures that the transaction will go through when a charge exceeds the card’s credit limit, and that they will be assessed a fee for the convenience. Should an individual opt out of over-limit fees, transactions exceeding the credit limit will be rejected and no fees will be assessed.

There are many more changes than I can list here; therefore, I encourage you to conduct some research on the Internet for the complete list of provisions.