Credit Card Reform 2010: 22 February 2010 Marks Changes
February 21st, 2010
Credit Card Reform 2010: 22 February 2010 Marks Changes. Credit card reform legislation that was passed in 2009 is set to go into effect on Monday, meaning that life as we know it is going to change.
Credit card companies faced a lot of scrutiny, which lead to reform. Main complaints were over hidden fees, rate hikes, and letting consumers get over their heads in debt. The official name of reform is “Credit Card Responsibility and Disclosure Act.”
Little did consumers realize once they hailed the reform as a win against credit card companies is that said companies are going to have to increase their fees in order to make up for losses they will incur due to legislation.
This means that interest free introductory rates, interest free grace periods, and no-annual fees may be a thing of the past. It is going to get more expensive to have debt than ever before.
On top of all this, the Fed recently raised the discount rate a quarter percent. This will cause mortgage and other debt rates to climb. Those that don’t have ample cash reserves could feel the pinch in the short term, but in the long run these changes will benefit the economy.
The good news is that arbitrary rate increases from the credit card companies will become a thing of the past. They must give consumers at least a 45 day notice before increasing rates, and cannot increase the interest rate during the first year someone has a card.
Don’t mistake the legislation’s changes for a free-for-all way of not paying your bill! You will be at the credit card company’s mercy should you fall 60 days or more behind in payments.
The credit card reform is a good thing, but change will be hard for many consumers. Don’t forget to review the reform to ensure that your credit card company doesn’t take you for a ride.
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