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Credit Card Law Changes

 


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The Credit card accountability, responsibility and disclosure law goes into affect on August 20,2010 The objective of the law is to safeguard consumers from unfair practices by banks and other credit card issuers. The questions is whether or not the law will have the impact anticipated. The laws was passed in Frebruary of this year. . The six-month lag for its enactment gave credit card companies sufficient time to modify fees and position themselves before it becomes effective.

The law does not speak to the biggest problems consumers have which is excessive debt and it merely may be a government attempt to quell public outcry over abusive practices by these companies. . Here are the highlights of the new law: • Retroactive rate increases - Issuers can't raise interest rate unless promotional period has expired. .

Cardholders cannot be punished for universal default, anytime or any reason clauses and for non-related accounts. When a cardholder demonstrates that he has paid on time for the past 6 months, the issuer must reinstate the lower interest rate. • Notice of Rate Hike - a 45-day notice period for key contract modifications and rate hikes. This does not apply to credit card limit changes. The rules don’t put a limit on interest rates. Your APR rate can still triple.

• Fee Restrictions - Issuers cannot charge cardholders an overlimit fee unless they approve the transaction and over limit amount. . • Restrict Credit Cards to under 21 - Those under 21 who can’t prove means of income must have a co-signor 21 or older to get approved. • Double billing cycle - the practice were interest charges are based on current and previous balances or double billing is terminated.

• Fairer payment allocation - Current payments are applied to lower interest balances first. Now the reverse hold true and must be applied to higher interest rate first. • More time to pay - The statement must be sent by the credit card company 21 days before payment is payable, currently it’s 14.

• Gift Card protections - a 5 minimum expiration of gift cards is mandated. It can be argued that some protection to the consumer is afforded by this law, at the same time it can be said it does not do enough. Additionally, credit card companies have had plenty of opportunity to raise rate and other fees favorably prior to the law becoming enforceable.

Therefore, the effect it will have will be subdued and credit card companies have position themselves well. The law does not address the problem of too much debt and gives no relief to those individuals. These individuals only real option is programs such as debt settlement and debt consolidation as the only viable options to be debtfree. The Credit card accountability, responsibility and disclosure law goes into affect on August 20,2010 The objective of the law is to safeguard consumers from unfair practices by banks and other credit card issuers. The questions is whether or not the law will have the impact anticipated. The laws was passed in Frebruary of this year. . The six-month lag for its enactment gave credit card companies sufficient time to modify fees and position themselves before it becomes effective. The law does not speak to the biggest problems consumers have which is excessive debt and it merely may be a government attempt to quell public outcry over abusive practices by these companies. .
Here are the highlights of the new law:
• Retroactive rate increases - Issuers can't raise interest rate unless promotional period has expired. . Cardholders cannot be punished for universal default, anytime or any reason clauses and for non-related accounts. When a cardholder demonstrates that he has paid on time for the past 6 months, the issuer must reinstate the lower interest rate. • Notice of Rate Hike - a 45-day notice period for key contract modifications and rate hikes. This does not apply to credit card limit changes. The rules don’t put a limit on interest rates. Your APR rate can still triple. • Fee Restrictions - Issuers cannot charge cardholders an overlimit fee unless they approve the transaction and over limit amount. . • Restrict Credit Cards to under 21 - Those under 21 who can’t prove means of income must have a co-signor 21 or older to get approved. • Double billing cycle - the practice were interest charges are based on current and previous balances or double billing is terminated. • Fairer payment allocation - Current payments are applied to lower interest balances first. Now the reverse hold true and must be applied to higher interest rate first. • More time to pay - The statement must be sent by the credit card company 21 days before payment is payable, currently it’s 14. • Gift Card protections - a 5 minimum expiration of gift cards is mandated.
It can be argued that some protection to the consumer is afforded by this law, at the same time it can be said it does not do enough. Additionally, credit card companies have had plenty of opportunity to raise rate and other fees favorably prior to the law becoming enforceable. Therefore, the effect it will have will be subdued and credit card companies have position themselves well.
The law does not address the problem of too much debt and gives no relief to those individuals. These individuals only real option is programs such as debt settlement and debt consolidation as the only viable options to be debtfree.

This law does not help those that cannot meet their monthly obligation or are having a difficult time with their debt. For them debt relief programs such as and offer the only real options to be debtfree.

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