Friday, August 21, 2009
Credit card companies now must give consumers 45 days notice before raising interest rates, based on provisions in the Credit Card Accountability, Responsibility, and Disclosure Act of 2009 that went into effect on Thursday. Under the new law, cardholders can decline a rate increase as long as they’re willing to close the account and pay off the remaining balance (at the current interest rate) within five years. Another provision that began this week requires lenders—before they can charge a late fee—to deliver monthly billing statements at least 21 days before payments are due.
Many of the new law’s provisions won’t go into effect until next year. As of February, credit card companies won’t be able to raise interest rates on existing balances unless cardholders are more than 60 days behind on their payments, or the increase is stated in the contract. Other changes for February include requiring adult co-signers for people under 21 to get a credit card and banning retroactive rate increases.
-Noel Brinkerhoff
New Limits on Credit Card Issuers Begin to Take Effect (Finally) (by Tony Pugh, McClatchy Newspapers)
Credit Card Relief: Phase One (by Ben Rooney, CNNMoney)
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