When the Credit CARD act passed earlier this year, we weren’t expecting to see many changes until February 2010, unless taken voluntarily by individual companies.
Thankfully (for me, anyway, since I have a personal vendetta against many aspects of credit cards, admittedly due in part to my own foolishness), some of the rules described in the law were designed to go into effect earlier than others. As the Wall Street Journal reports:
Credit card issuers, starting next week, will be required to give consumers 45 days’ notice before raising their interest rate or making other significant changes to a card plan’s terms.
I don’t see this as a punishment, or a blow to capitalism in any way. I think it levels the playing field, assuming life is a competition between a consumer and the huge corporations who do everything they can to maximize profits.
Furthermore:
Issuers also must begin sending bills 21 days before payment is due.
In related news, Discover and American Express are getting rid of fees for exceeding your credit limit. A part of the upcoming Credit CARD rules also has something to say about those fees:
The law doesn’t require issuers to eliminate over-limit fees, but it will prohibit them from imposing these charges unless consumers say they want the ability to exceed their credit line.
Once again, I find that totally fair, and I think it’s a shame that we had to have the legislature step in and finally put a stop to such offensive practices.
New Credit Card Rules To Take Effect Next Week , Jessica Holzer, Dow Jones Newswires, August 13, 2009
Discover, American Express end fees for exceeding limit, Kathy Chu, USA Today, August 11, 2009
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Back in May I posted my thoughts on this bill – http://newfromclt.blogspot.com/2009/05/credit-card-bill.html.
In summary, congress passed a law that basically had already been covered by the Federal Reserve. I agree it makes sense for credit card companies to notify you or rate changes in advance and most of the other parts of the bill just make sense. The Payment Card Industry should have declared all of these items a standard and “encouraged” issuers to adopt them.