Today is money education day at Young Wealth! A while back the federal government decided that credit card companies had been running roughshod over their customers, and decided to do something about it. The end result was a brand new set of rules designed to protect consumers, which went into effect February 22, 2010. Since most people won’t take the time to read these changes, we’ll hit the highlights.
Your credit card company must…
…give you 45 days advance notice before they raise your interest rate or any other fee. At the same time, they must offer you the chance to cancel the card before the change occurs. If you choose to cancel the card, they can cancel your account and raise your monthly payment (subject to limitations). In addition, your friendly neighborhood credit card slinger must post the following plainly on your monthly bill:
1.How long it will take to pay off the balance making minimum payments
2.How much you must pay monthly to pay the balance off in three years
Rates, fees, and limits…
After signing up for a new credit card, your company cannot increase the interest rate for 12 months unless it is tied to a variable index, is an extremely low introductory rate (which must remain in place six months), or you are later than 60 days paying your bill. Consumers under the age of 21 must show they have the financial resources to make payments on a credit card or must have a co-signer before they can open an account.
There’s more to the new regulations but that’s probably enough for now. Don’t want your brain to overheat.
The Young Wealth Team