What Changes Does The New Credit Card Law Bring?

The Credit card accountability, responsibility and disclosure law goes into affect on August 20

,2010 The laws are intended to protect consumers from abusive practices by credit card companies. The questions is whether or not the law will have the effect anticipated. The law was put into affect in February 22,2010. The six-month lag for its enactment gave credit card companies sufficient time to modify fees and position themselves before it becomes operative. The law does not address the biggest problems consumers have which is too much debt and it merely may be a government effort to quell public outcry over abusive practices by these companies..

Here are the highlights of the new law:

Retroactive rate increases - Issuers must wait for the promotional period to expire in order to raise interest rates. . Borrowers cannot be punished for non-related accounts under universal default or due anytime, and any reason clauses. If cardholder is not 60 days delinquent, the bank must restore the lower rate when the cardholder demonstrates 6 months of on time payments.

Notice of Rate Hike - establishes a 45 day period for key contract changes and rate hikes. This does not apply to credit card limit changes. The laws does not stipulate a limit on interest rates. They can still triple your APR>

Fee Restrictions - Issuers cannot charge cardholders an overlimit fee unless they approve the transaction and over limit amount..

Restrict Credit Cards to under 21 - Students and other 21 must prove financial independence or have a co-signor over 21 to receive a credit card.

Double billing cycle - ends the practice of basing interest charges on the current or previous charges, or double-balance billing.

Fairer payment allocation - int the current system payments are applied to lower interest balances than to the high one, the law reverses this procedure.

More time to pay - The statement must be sent by the credit card company 21 days before payment is due, currently its 14.

Gift Card protections - gift cards does not allow gift card from expiring for a minimum of 5 years.

It can be argued that some protection to the consumer is afforded by this law, at the same time it can be said it does not do enough. Furthermore, credit card companies have been hiking interest rates, imposing new fees and changing other terms favorable to them in anticipation of the law. Therefore, the effect it will have will be subdued and credit card companies have position themselves well.

The law does not address the problem of too much debt and gives no relief to those individuals. For them debt relief programs such as debt consolidation and debt settlement which offer the only real hope to be debtfree.

by: Mimi East

POST COMMENT

Travel Ideas Them Park Vacation Deals Beautiful Orlando New Thrills Orlando Airports Low-cost Airlin Dvr Hidden Spy Camera-the New Generation Of Hidden Cameras Solar PV Energy – Dump Polluting Oil Companies & Go Solar! Massage Therapy Schools In New Mexico And A Career As A Massage Therapist NoxEdge Muscle Supplement Gets a New Raving Review Protecting Your Children from Damaging New audio SEO Services New Orleans:: For SEO methodologies Will Consumers Get Relief From The New Credit Card Law? Considering New Homes In San Diego The Quality of Philippine Education in the New Millennium What You Should Know About Solar Companies Astonishing energy news across the world A NEW STUDY REVEALS CONSCIOUS CHOICE AND MEMORY RETENTION FOR CATERPILLARS WHILE INVESTIGATING CONSCIOUSNESS AFTER DEATH FOR HUMANS