How the World of Credit Cards Has Changed
The Credit Card Accountability Responsibility and Disclosure Act of 2009 was a sweeping reform of the nation’s credit card practices that may end up saving consumers $10 billion a year.
Here’s a quick review of the changes, which should theoretically make using credit cards easier and less prone to overdraft and interest rate tricks.
Rate raises and promotional rate changes are now more strictly regulated. This means that when you sign up for a card with a promotional rate, it must last for at least half a year, and the terms of the card must remain constant for a full year.
New higher interest rates cannot be apply to existing balances, and when you pay the card, the money goes to the balance accruing the most interest first.
There will be no more tricks with movable payment due dates, which now have to be consistent and clearly displayed. The companies can’t send the bill at the last second any more – instead, they must send it at least 21 days before the deadline.
You’ll get a warning when you’re close to exceeding your credit limit, and the company now has to tell you how long it will take to pay off your debt using the minimum payment.
There are more provisions in the law, including the right to decline to accept new fees or rules, but these are the main changes.