![creditcardreform[1]](http://thatssonorthwest.com/files/media/image/WindowsLiveWriter/TheCreditCARDAct2009_828C/creditcardreform%5B1%5D_2.jpg "creditcardreform[1]")
By now most of us consumers are aware of the Credit CARD Act implemented by President Obama to limit big, bad credit card companies from interest rate hikes, unfair fees, lazy billing practices, and not enough time between change in terms notices. But most of us don’t know what it ALL entails so to help ensure you know your rights I’m going to break the Act down in 3 segments for you: rates and fees, youth credit and disclosures and what it means to Credit Union lending. Just to be clear there are 2 important dates regarding the act: August 20th 2009 and February 22nd 2010. So before we hit the rates and fees I want to focus on a detail effective August 20th. Monthly billing statements must be mailed at least 21 days before the due date. This is effective immediately so make sure you’re getting your proper notice time! If your account has a grace period, charges can’t be assessed unless the card user receives the statement at least 21 days before the finance charges are to begin.
Rates and Fees: what the Act means for your wallet!
Effective February 22nd 2010 you’ll have to “opt in” to get over-limit fees. Yes that’s right. You’ll have to agree to get them. If you don’t then it just means your transaction that would bring your balance over the limit will be declined at the store. That’s bad if you’re standing in line with a cart full of groceries…good so you don’t get any fees.
Any monthly payments received that exceed the minimum payment amount will be applied to the highest rate balance first, the next rate, etc. So the cash advance that you did last month won’t follow you around until you pay it off. Nice.
Due dates will always be due the SAME day. No more wondering what day it’s due and if the date falls on a weekend or holiday your payment will be credited the next business day.
No more increased rates if you make a late payment on unrelated accounts; i.e., power bill or other credit account. Also, interest rates can’t increase during the first year unless:
An introductory period or “teaser” rate expires. Write down the date your card offer expires to ensure you stay on top of it!
An interest rate is tied to a tier and is variable. Check with your card company and see if your card is a fixed or variable rate.
The card user completes a workout plan for debt repayment or fails to comply with terms of a workout plan.
The card user is 60 days late. However, the card issuer must provide reason for the fee and put the rate back as soon as the card user has paid on time for 6 months. This is awesome because you’re no longer doomed if you make 1 late payment!
You will no longer have to pay to pay! Meaning no longer getting charged additional fees depending on the method of payment you choose.
I hope I’ve helped with some of the unknowns and clarified this Act for you. I know that there are still some questions out there though so please put them in the comments section and we’ll get you the answer! Keep your eyes open for the next post regarding youth and disclosures……
photo credit: here
Suscribe To This Blog
