July 2009

Credit Card Reform Bill
Officially labeled  ”The Credit Card Accountability, Responsibility and Disclosure Act”, parts of the act go into place in August, with most of the other parts in place starting February of 2010.  Listed below are the breakdowns of the roll out for this bill.

August 2009:
1.  Statements must be mailed 21 days before bill is due (improved from current 14 days)
2.  Issuers have to give 45 days’ notice (vs. 15) before increasing interest rates and fees.

February 2010:
3.  Issuers can no longer raise rates on an existing balance, unless payment is more than 60 days late or a teaser rate expires.  
4. Teaser rates must be in effect for at least six months.
5.  Except for expiring teasers, the rate on new purchases can’t be hiked in the first year.
6.  Payments in excess of the minimum owed must first be applied to the balance with the highest interest rate, and then to other balances in descending order.
7.  Over-limit fees can be applied only if a consumer opts in for approval on going over the credit limit.
8.  Applicants under age 21 must have an adult co-sign, or show proof of income for approval.
9.  Issuers can’t offer sign-up gifts on or near college campuses.
10. Issuers can no longer practice “universal default” – that is, raise your rates if they learn that you were late on another account.
11. Issuers must indicate in statements how long it will take to pay off a balance (and the total cost) if you make only minimum payments.
12. In calculating finance charges, issuers cannot average in daily balances from the previous billing cycle.

August 2010:
13. Cardholders assessed a penalty APR for late payment can reclaim the lower rate if they pay on time for six consecutive months