The Credit Cardholders’ Bill of Rights

30 Sep The Credit Cardholders’ Bill of Rights

Now that you’ve read the 11 Mistakes to make on a Credit Card (Parts One and Two), you should know that Congress has tried to rein in these practices. With the crisis in credit, focus has fallen on the credit card companies and the abuse they perpetrate on the consumer.

The legislation prohibits or limit a number of card issuer billing practices that are unfair or that difficult to understand even if disclosed: (1) universal cross-default; (2) any-time, any-reason rate changes; (3) retroactive application of interest rates; (4) two-cycle billing; (5) unlimited applications of overlimit fees in a single billing cycle; (6) opt-out of overlimit transactions; and (7) require pro rata application of payments to balances accruing at different interest rates. In addition, It requires issuers to define the due date, requires payments received by 5pm EST on the due date be treated as timely, and creates a presumption of timely payment for payments sent by mail at least 7 days before due. Finally, it eliminates the use of “fee harvester” cards where the initial fees approach the credit limit of the card, resulting a credit line that is nerly useless and impossible to pay.

All of this sounds great doesn’t it? Here’s the bad news; it doesn’t take effect until February 2010. You can start counting the months and days now.

“ConnecticutGene Melchionne is a bankruptcy lawyer covering the entire State of Connecticut. He can often be found on Google+ and Twitter, where he shares information about consumer protection issues and personal finance.

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