Don’t Believe The HYPE? New Credit Card Rules Take Effect
Everyone’s cheering today because the new credit card
rules will go into effect. Here are the quick bullet point changes:
New Credit Card Laws In Effect
- They can’t increase your interest rate for 1 year.
- They can’t increase your interest rate on old purchases.
- They must inform you how long it will take to pay off your current balance if you continue to pay the minimum monthly payment.
- They must give 45 days notice for any major changes that they intend to make to card holder accounts.
- They must get your payment request mailed out with 15+ days before due date.
Other provisions of the bill include:
- Fines of up to $5,000 for card issuers that violate the act.
- Banning universal default and double-cycle billing.
- Prohibiting over-limit fees unless consumers agree to allow transactions that exceed their credit limits to go through rather than be denied.
- Fees for late payments, over-limit charges or other penalty fees must be reasonable and related to the violation.
- Extending the life of gift cards and gift certificates so that they cannot expire within five years of activation. Banning dormancy or inactivity fees on gift cards unless there has been no activity in a 12-month period.
- Banning credit cards for people under the age of 21 unless they have adult co-signers or show proof that they have the means to repay the debts. College students must get permission from parents or guardians to increase credit limits on joint accounts they hold with those adults. The new law will ban those free pizza and T-shirt giveaways — popular on many college campuses — if students sign up for credit cards. Colleges, universities and alumni associations would have to disclose the nature of contracts they sign with credit card marketers allowing access to student and alumni contact information.
- Requiring that card issuers disclose how long it would take to pay off credit card balances if cardholders make only minimum payments each month and how much users would have to pay each month if they want to pay off their balances in 36 months.
