Credit Card Rules Revised

By Justin Gardner | Related entries in Economy, Law, Money

This is definitely good news.

From Wash Post:

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.

2 Responses to “Credit Card Rules Revised”

  1. Bposter Says:

    I think that’s great news – I also agree that yes it’s is really just the first step in what needs to be done. Credit Card companies at this point do not have enough transparency in all the fees and rates they have – and the make it nearly impossible for normal folks to understand how everything works. who I work with is trying to make positive change on interchange fees which are another hidden fee they tack on there. But I’m glad to see at least something is starting to get done.

  2. goddog Says:

    Don’t depend on government to enforce any of their own rules when it comes to banking, ie credit card use. The consumers only defense of choice is to “stop using credit cards” period….. boycott, boycott, boycott.
    That, kiddies works real well to change to rules of the game.

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