This is definitely good news.
The new rules would require companies to tell customers 45 days before terms of a credit card contract are changed, compared with 15 days now. And the rules would expand the list of changes requiring advance notice to include those involving penalty interest rates, which often range above 30 percent. Today, most consumers learn only after opening their monthly bills that they have been penalized with significantly higher interest rates because of paying late, going over their credit limits or falling behind with another lender.
Because much of the type in disclosures is so small, many card holders do not bother reading the statements. The new proposal calls for larger type in some instances. It would also require companies to say on monthly statements what interest and fees a customer had paid so far for that calendar year.
Companies would also be required to spell out that low rates on balances transferred from another credit card apply only to that balance, not to new purchases. And it would require companies to apply payments to the debt carrying the highest interest rate. Many companies now apply payments to the least costly debt, thus forcing customers to pay more in interest.
I hope this is only one step in a long process of getting these companies to reform their tactics.
This entry was posted on Monday, May 28th, 2007 and is filed under Economy, Law, Money. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.