What the new credit card law means for you as a consumer.
Lawmakers have finalized a federal law to protect millions of consumers who rely on credit cards, what does this new law mean to you as a current card holder? Credit card users will avoid retroactive interest rate increases on existing card balances and have more time to pay their monthly bills, greater advance notice of changes in credit card terms and fewer penalty fees, late charges and interest payments.While the new rules are designed to increase protections for consumers, there is the chance that they may result in increased costs for some card users and reduced credit availability, particularly for consumers with lower credit scores or limited credit history. Some of the highligts are listed below:
Limited interest rate hikes: Interest rate hikes on existing balances would be allowed only under limited conditions.
More time to pay monthly bills: Credit card issuers would have to give card account holders "a reasonable amount of time" to make payments on monthly bills.
Highest interest balances paid first: When consumers have accounts that carry different interest rates for different types of purchases payments in excess of the minimum amount due must go to balances with higher interest rates first.
Minimum payments: Credit card issuers must disclose to cardholders the consequences of making only minimum payments each month.
No more universal default: the practice of raising interest rates on customers based on their payment records with other unrelated credit issuers.
Portions of the law took effect Aug. 20th with most protections starting by Feb. 22, 2010. These are just a few of the changes, I suggest doing some further research on your own to get a full detail of the changes as well as how they can effect you personally.