After several months of waiting (during which, banks have had plenty of time to jack up your interest rates and cut your credit limits), the Credit CARD Act of 2009 has finally kicked in. If you haven't been following the news, here's a quick run-down of what's changed and what hasn't.
• No more retroactive rate hikes.
Credit card companies can no longer apply the higher interest rate to previously held balances.
• No more universal default
; one credit card can't raise your rate simply because you've missed a payment on a different card.
• Your credit card statements must be mailed to you 21 days before payment
due date and payment due dates can't suddenly change. Be warned that there may be an increase in banks mailing out statements in unfamiliar or unmarked envelopes so as to confuse account holders.
• Your statements are now required to explain how long it will take you to pay off your balance — and the total amount of interest you will have paid
— if you only pay the monthly minimum. HOWEVER, if you do not begin paying immediately, or if you miss a payment during the 6-month period, that penalty rate may end up being permanent.
• They must now give you 45 days notice
before changing any terms and conditions in your agreement.
• They can only charge you an increased penalty rate if your account goes past due for 60 days
. And if you begin making on-time payments immediately, after 6 months they are required to restore your previous interest rate.
• To recoup some of the expected losses due to the new the new regulations, credit card companies are expected to begin charging fees for services like paper billing and overseas purchases
. Additionally, expect a hike in fees for cash advances.
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