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New Credit Card Protections Take Effect Thursday

August 19, 2009

As of tomorrow, it will be 90 days since the Credit CARD Act of 2009 was signed into law on May 22.  That’s an important milestone, because it’s the first day that the Federal Reserve regulations implementing some parts of the law will take effect. 

So starting Thursday, credit card companies must give their customers 45 days advance notice when they raise the interest rate or make any other significant change to the terms of the card (currently, only 15 days notice are required), and the notice must inform customers of their right to cancel the card and pay off the existing balance at the current interest rate.  In addition, the companies must now mail monthly statements at least 21 days before payment is due (up from 14 days). 

Apart from these new requirements, though, the credit card companies will still be able to trick and trap their customers until the law becomes completely effective on February 22, 2010.  Consumer-Action (an AFFIL Partner) has prepared a handy summary of the law’s provisions and when they take effect.   As Consumer Action’s Joe Ridout told the Washington Post, “Unfortunately, for another six months consumers are just sitting ducks for whatever abuses credit card companies can dream up.”

There is a solid basis for Joe’s comments – Consumer Action recently released its annual survey of credit cards rates, fees, and other terms.  It proves what we all suspected: the credit card companies have been raising rates and fees in anticipation of the upcoming changes.   The survey of 39 credit cards from by 22 banks and credit unions found, in addition to widespread hikes in interest rates, that the average late fee rose by more than two dollars and that both balance transfer fees and cash advance fees were increased, to as high as five percent

(Photo:  The Truth About)

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2 Comments
  1. Michael J Mattis permalink
    August 24, 2009 3:31 pm

    Well the Congress gave the Credit Card Companies enough time to jack my interest rates to 29% just before the deadline. I am not in a position now to pay off these cards but when I do I will never do business with these cards or their surrogates again. One card company did try to help us out, Discover. They gave us a 9.9% interest rate for a year if we put the two cards on auto pay. Now thats trying to work with the consumer. They are on our list for use in the future.

  2. Miriam Wesley permalink
    August 27, 2009 1:40 am

    Ditto on the above comment (from Mr. Mattis). My interest rate went from 8.9% to 15.9% in January, then went up again to 21.9% then 25.9% when I was one day late (the company had never done this before). Discover card gave me a good rate and 0% balance transfer to offload some of my new debt, which will help some. I am so sick of Citicard (who, by the way, almost went bankrupt from bad debt, but has no problem castrating its customers for profits). I just can’t wait to clear off these cards – my new mission in life.

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