Credit Cards: What the Credit Card Bill Means for You

New laws effecting credit cards go into effect this year and next thanks to the Credit Card Accountability, Responsibility and Disclosure Act. Most of the credit card changes help consumers but some might also hurt consumers.

Credit Cards

Starting in August 2009 monthly credit card bills must be mailed out 21 days in advance by credit card issuers. This should help credit card holders getting their payments in on time and from incurring late payment fees. Also starting next month credit card companies have to give consumers 45 days notice before increasing credit card interest rates and credit card fees.

More credit card changes are instore for 2010. Starting in February 2010, banks can’t raise credit card rates on existing balances unless your behind more than 60 days on your payments. Without a doubt, this is probably the biggest win for consumers. Introductory rates, like balance transfer credit card rates must have a minimum six month period.

Another big benefit for consumers is payments that are over the minimum payment due must be applied to higher interest rate balances first, then on down in descending order.  Just the opposite happens now. This rule change will also take place in February 2010.

You have to opt in for going over your credit card limit. Unlike now where card issuers allow you to go over the limit but smack you with an over the limit fee. Also in February 2010, you must have an adult co-sign a credit card application or show proof income to be approved.

Universal default, which is a nasty practice credit card issuers were allowed to do will no longer be an option for them. Universal credit card default was the practice of raising your credit card rate if they learned you were late making a payment on another credit card account.

Starting in August 2010 if your credit card rates were raised because you were late making a payment after six months of making payments on time the credit card issuer has to lower your credit card rate back to the previous level.

Banks are looking into other ways to generate more revenue of their credit card accounts. Some banks might increase credit card fees now and start charging new fees to replace the fees lost because of the changes. Banks might also pair back credit card rewards.

Looking for the best credit card rates? MonitorBankRates.com has a credit card comparison search engine. You can compare rates by category including low interest credit cards, instant approval credit cards, rewards credit cards, gas credit cards,  cash back credit cards, business credit cards, student credit cards and more.

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