In 2009 the federal government passed the 2009 Credit Card Act; here is a Credit Card Act 2009 summary . Coming on the heels of the recession, many people expected big changes to come that would protect them as credit card users. And it’s true that some things changed and there are some credit card act benefits , while other things didn’t.
The new act limits interest rates except on existing balances, in most situations. What this means is that if you owe $1,000 on your credit card. At some point something happens with your credit or the issuer’s rules to make them want to raise your credit limit. They have the right to increase your interest rate. However, they can only increase it on future purchases, not on the $1,000 you already owe.
There are some exceptions. The most notable is that if you are 60 days late or more the card company can increase your interest rate on your entire balance. However, once you are on time for six months straight they must return your rate to the previous amount.
Over the limit fees can only be charged if the cardholder agrees to them. After the act passed many companies sent out letters asking customers if they wanted to opt-in to over-the-limit fees. If you chose to opt-in then you will pay a fee whenever you go over your limit. If you did not opt-in to this fee then your credit card will probably be denied if you try to go over your limit.
Charges to Pay Bill: Credit card companies may not longer charge a fee to pay your bill online, by phone or by mail. However, there is an exception: they may charge this fee if they are accepting an expedited payment, the definition of which may vary from company to company.
Credit card companies must mail or send statements at least 21 days before the due date or end of the grade period.
While due dates used to vary as many card companies used 28 day schedules, now payments must be due on the same day of each month.
There are many other changes due to the Credit Card Act of 2009, some of which have nothing to do with credit cards, as often happens with federal acts. However, the above list are the most important ones, those which probably will impact you the most. What you may wonder is why we didn’t mention changes to minimum payments, as most people saw changes to their payments around the same time as this act went through.
With the credit card act ability to repay is not really addressed. The fact is that the Credit Card Act of 2009 did not mandate changes in minimum payments. However, many credit card companies and banks decided to make some changes to minimum payments to ensure that balances were paid off a bit faster. While before this act it was common to have minimum payments of just 1% of the balance, today it is more common to find minimum payments that are 1% or 2% of balance plus interest for the period. Of course, paying more than that is always a smart move.
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