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Fed Proposes Credit Card Intiative to Help Consumers

Do You Read Credit Card Disclosure Forms?

Aside from spending its time making important decisions about our economy, the Federal Reserve stood up to credit card companies on Friday by proposing a set of rules that would be helpful to credit card-using consumers. If approved, the new rules would affect the following changes.

  • Specify when card issuers can increase interest rates on existing balances.
  • Ban finance charges on balances that have been repaid.
  • Prohibit late fees on customers who were not given a reasonable amount of time to pay.
  • Companies wouldn't be allowed to direct payments to pay down the portion of the bill that had lower interest charges.
  • Give consumers the right to opt out of overdraft protection on their deposit accounts.

Ben Bernanke, the Federal Reserve's Chairman, said their previous efforts to require companies to improve their disclosure forms wasn't enough. He explained, "Based on our review of consumers' response to the Board's recent regulatory initiative, it seems clear that improved disclosures alone cannot solve all of the problems consumers face in trying to manage their credit card accounts."

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sorrowja sorrowja 7 years
All I need to know is what is my limit, due and interest rate??
shanimalcracker shanimalcracker 8 years
This is sad, but I'll start reading them then just not care anymore. I've never carried over a balance on a credit card so I guess I am a little lax about learning about charges.
MindayH MindayH 8 years
Read every detail. I don't understand why someone would sign up for a card and not do so.
lizs lizs 8 years
It's soooo irresponsible to make a financial agreement without reading the terms! Credit cards aren't toys. If more people read these things, creditors wouldn't be able to get away with so much....The most important part to read, IMO, is the part about default rates - in most cases, if you make a late payment on any other line of credit (some student loans, your car payment, another card, etc.), your rate will skyrocket. I see a ton of surprised cardholders commenting about that problem on personal finance blogs...but if they had read the terms, they'd have known.
lizs lizs 8 years
It's soooo irresponsible to make a financial agreement without reading the terms! Credit cards aren't toys. If more people read these things, creditors wouldn't be able to get away with so much.... The most important part to read, IMO, is the part about default rates - in most cases, if you make a late payment on any other line of credit (some student loans, your car payment, another card, etc.), your rate will skyrocket. I see a ton of surprised cardholders commenting about that problem on personal finance blogs...but if they had read the terms, they'd have known.
bellaressa bellaressa 8 years
I wish I read them more closely; however, I don't. It's a bad thing.
bluebird bluebird 8 years
I don't always read the forms thoroughly, but I file them along with the monthly statements I get so that I can look back and review information I'm unsure about.
fortunate-fool fortunate-fool 8 years
I get made fun of by my boyfriend for it, but I read every last word.
mini_pixie mini_pixie 8 years
I truly hope these changes are approved, I think they will make a difference. Especially not allowing the company to direct your payment to the balance with the lowest interest rate first. I have several credit cards with low interest balance transfer offers, but have charges on them that would be at a higher rate, and have been reluctant to use the balance transfer offers since the whole time I would be accruing a bunch of interest on the existing purchases.
mini_pixie mini_pixie 8 years
I truly hope these changes are approved, I think they will make a difference. Especially not allowing the company to direct your payment to the balance with the lowest interest rate first. I have several credit cards with low interest balance transfer offers, but have charges on them that would be at a higher rate, and have been reluctant to use the balance transfer offers since the whole time I would be accruing a bunch of interest on the existing purchases.
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