As recently reported by Detroit Consumer Attorney, Kurt O’Keefe, today Federal regulators adopted new rules that restrict the ability of the credit card industry to increase interest rates on existing account balances.
The new rules take effect in July of 2010.
Under the new rules, credit card companies will no longer be permited to raise interest rates on current credit card balances. The credit card companies would still be able to raise interest rates for future purchases or advances.
The new rules also restrict lenders from allocating all payments to balances with lower interest rates when a consumer also has balances with higher rates, such as the situation where the consumer has both credit card charges at one rate and and cash advances at another rate.
Consumers will now also have 45 days notice before any changes are made to the terms of an account, rather than the 15 day notice currently required.
