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New Credit Card Rules From The Federal Reserve

[Feb 6, 2010.]

 

If you have been trying to eliminate credit card debt, good news is ahead. In an attempt to help consumers get out of debt faster, the Federal Reserve has new rules going into effect this month. Beginning February 22, 2010, you can expect the following from your credit card company.

  • No more unexpected changes to the terms of your credit card! Credit card companies will now be required to notify you a full 45 days in advance of any interest rate changes, fee changes, or other significant changes to your account's terms. Some exceptions apply. You will have the option to close the account before the changes take effect. However, the credit card company would then have the option to increase your monthly payment for faster payoff.
  • You will now be able to see, on your monthly statement, exactly how long it will take to pay off your current balance making just the monthly minimum payments. It may just shock you into paying more each month to see in print that making the minimum payment means years and years of indebtedness. You will also be given a payment amount for a pay off in three years. Seeing these payment choices on your statement each month should motivate you to eliminate credit card debt faster.
  • On new credit cards, the card company cannot raise your interest rate for the first year. Some exceptions apply. If the interest rate increases after the first year, the new interest rate can only be applied to new charges. Your old balance will continue to be charged the old interest rate.
  • You will now have the opportunity to opt-out of over the limit transactions. Instead of being approved at the point of sale, you can choose to be declined. This will save you having to pay an over the limit fee on your statement. It may also cause you to keep a more careful watch on your balance so that you won't suffer the embarrassment of a declined credit card.
  • Under aged consumers, those younger than 21 years old, will now have to prove the ability to repay their debts before they can be given a credit account. No more throwing cards at the youth of America before they are really ready.

If you feel you need to speak to a professional about debt solutions, follow this link.

 

About Author:

Renee Morgan has been a loan officer for over eighteen years. She is also a freelance writer and guest expert for radio and TV.

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