The rules for credit card users are changing reports The Wall Street Journal. Good news unless your under 21 – read on…
New Law Forcing Credit-Card Issuers to Play Fair – WSJ.com
By JONNELLE MARTEThe rules of credit are changing. Consumers will see improvements this month as credit-card companies roll out the latest in a big series of government-ordered reforms on how they operate.
The various provisions of last year’s Credit Card Act give consumers more disclosures and restrict credit-card rates and fees. Further, the financial-overhaul bill signed by President Obama last month creates a new consumer-protection agency and entitles consumers to more information.
“Institutions are going to be forced to become more accountable to consumers,” says Adam Levin, chairman and co-founder of Credit.com.
But the news isn’t all positive: Credit-card companies are making up for lost revenue by adding new fees and increasing interest rates.
More Disclosures
The Credit Card Act, formally known as the Credit Card Accountability Responsibility and Disclosure Act, requires card companies to give consumers 45 days advance notice before increasing interest rates, changing certain fees or making other significant changes.
Payments and Fees
Since February, card companies have been required to deliver your bill at least 21 days before your payment is due, and your payment must be due on the same date each month.
Interest Rates
In addition to requiring the 45 days advance notice, the Credit Card Act prohibits card companies from raising rates for the first 12 months an account is open, unless you are more than 60 days late in paying your bill or if an introductory rate has expired — and those must last for at least six months.
Challenges for Young Adults
The law makes it more difficult for people younger than 21 to obtain credit cards, by requiring that they have a cosigner or prove they can afford to make the payments. The restrictions mean some younger consumers may have to turn to alternative methods for building credit.
