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News Article
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Credit cards and the law
Commonly known as the Credit Cardholders’ Bill of Rights, its full name is the Credit Card Accountability Responsibility and Disclosure Act of 2009.
It is a federal law that is designed to protect credit cardholders from unfair practices by credit card companies. Here are some of the important rights this law grants you.
Interest rates
• Your regular interest rate cannot be increased during the first 12 months of opening a credit card, unless you are more than 30 days late with a payment. Promotional interest rates must last at least six months.
• An interest rate increase can only apply to new charges, not the pre-existing balance. This rule does not apply if you are past due more than 60 days.
• If your interest rate was raised due to making a payment late, the card issuer must reinstate the lower interest rate if you make on-time payments for six months.
• You must be given at least 45 days notice of an interest rate increase.
• Universal default clauses are prohibited, meaning a creditor can no longer raise your interest rate because you were delinquent with another creditor.
Fees
• You cannot be charged an over-the-limit fee unless you authorize your credit card company to process over-the-limit transactions. If you do provide authorization, you can only be charged one over-the-limit fee per billing cycle.
• You cannot be charged a fee for paying your bill online or over the phone, except for expedited (last-minute) phone payments.
• The amount of any fee charged must be reasonably related to the actual cost the creditor incurred as a result of your action.
Next week, how the new law protects credit card holders when it comes to billing practices.
For more information, call BALANCE at (888) 456-2227 or go online to www.balancepro.net.
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