securedservers

changes in credit card rules likely to be passed, some interesting provisions, how do you think this will affect this industry?

nytimes.com/2009/05/20/your-money/20money.html?hp

¶First, and perhaps most important, there are new restrictions on when credit card companies can increase the interest rate on balances that you?ve already run up. The Senate bill says that banks must wait until you?re 60 days late in making the minimum payment before they can apply a penalty interest rate to your existing debt; the House bill mandates a 30-day wait.

It?s not yet clear how legislators will reconcile the variations. The House may end up voting on whether to simply accept the Senate?s stricter bill, or there may be a horse-trading conference of sorts to work out compromises.

¶The Senate bill requires card companies to, in effect, lower interest rates for cardholders who have exhibited good behavior and paid on time for six consecutive months. Some cards, like Citi?s new Forward card, already offer a similar feature. The House bill has no such provision.

¶Both bills require card companies to give 45 days? notice before raising the interest rate. The Senate bill, for good measure, requires such notice for any significant change to the card. That may mean that card companies can no longer spring huge alterations in reward programs, effective immediately, on customers who are just short of a reward that they?ve saved for for years.

¶Banks must send your bill out no later than 21 days before the due date. They cannot send it with, say, 14 days to go, hoping that you won?t get a check back in time to avoid a late fee.

¶If the card company gets your payment by 5 p.m. on the due date, it?s on time, according to the new rules. No more of this early-morning deadline nonsense that some card companies were engaged in, aimed at hitting you with a late fee if your payment arrived with the afternoon mail. Also, no more late fees if the due date is a Sunday or holiday and your payment doesn?t arrive until a day later.

¶Let?s say you?re paying many different interest rates on the debt on a single card, one for a cash advance, another for a balance transfer and a third for a new purchase. Now, when you make a payment over the minimum balance, banks will have to apply it to the highest-interest debt first. I bet you can guess how many banks used to handle this sort of situation.

¶At long last, banks must now ask you to opt in before granting you the ?privilege? of spending more than your credit limit and paying a fat $39 fee for the privilege. If you want to pay that fee, you?ll have to ask them first.

¶If you?re a student, it will get harder to get a credit card. In the House version of the bill, no one under 18 can apply for a card unless a parent or legal guardian is along for the ride as a primary cardholder.

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gmr324

It's about time someone clamped down on the credit card mafia!