REMINDER: New Credit Card Rules Go into Effect in 2010

29 Sep REMINDER: New Credit Card Rules Go into Effect in 2010

New rules prohibiting unfair collection acts and practices will go into effect in 2010.  The Federal Reserve Board announced last December the approval of these new rules to better protect credit card users.  

In the meantime, credit card companies are positioning themselves to try to lessen the impact on them of the new rules.

For instance, credit card companies are taking advantage of consumers who are late with their credit card payments.  Creditors are now, without prior notice, raising the interest rate on late paying consumer’s credit card debts, by three or four, or even five times the rate it was before.

In addition, new credit card applicants are finding themselves subject to more stringent screening processes as well as a higher interest from the beginning.

The following is a synopsis of some of the new rules:

 Credit card companies will not be able to raise interest rates on money already borrowed unless the debt was incurred on a variable rate card or the minimum payment was made more than 30 days late.

  • After a credit card is issued the interest rate cannot be raised for at least one year
  • Deferred interest rate credit cards will no longer be allowed
  • If a credit card company does not send a billing statement at least 21 days prior to the due date, they will not be able to assess a late fee
  • When you have more than one account with a credit card company they must distribute your payment to the highest interest rate account or prorate the distribution
  • Two-cycle billing will not be allowed
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Peter Orville is a bankruptcy lawyer in Binghamton, located in the Southern Tier of New York. He is a member and New York co-chair of the National Association of Consumer Bankruptcy Attorneys.
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