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New Credit Card Rules Protect Consumers

We can certainly live without credit cards, but for a very long time we were fooled into thinking that wasn't the case. Credit card companies were able to get away with a lot during that time and weren't always regulated in ways that would protect consumers. Yesterday, the Fed ruled on a set of new regulations that are obviously consumer-oriented, but credit card companies won't have to act accordingly until 2010. According to the AP, carriers will be prohibited from the following under the new rules.

  • Placing unfair time constraints on payments. A payment could not be deemed late unless the borrower is given a reasonable period of time, such as 21 days, to pay.
  • Placing too-high fees for exceeding the credit limit solely because of a hold placed on the account.
  • Unfairly computing balances in a computing tactic known as double-cycle billing.
  • Unfairly adding security deposits and fees for issuing credit or making it available.
  • Making deceptive offers of credit.

To see what else credit card companies will be accountable for under the new rules,


  • Credit card lenders will be required to apply any payment above the minimum to the part of the balance with the highest interest rate.
  • The so-called subprime cards for people with low credit scores typically have no more than a $500 credit limit but require a large upfront fee.
  • The rules cap that fee at 50 percent of the credit limit and allow the cardholder to pay off the initial balance over a year, not immediately.


Join The Conversation
sundrops sundrops 8 years
Where in this does it say that they will not be requiring people to pay off their debt? This is solely stating that credit card companies cannot take advantage of their customers. You wouldn't want to go to the store and buy an item and later have the company send you a bill for 12% of the item plus $35 for paying at the wrong register would you? Oh, and, the bill also includes that the item wasn't actually on sale and you have to pay that difference, too. It feels like credit card companies are currently allowed to exercise those kind of practices even if it is in the fine print (have you ever looked? Sometimes it's not, they just get away with it because people assume it is). Oh, and I am paying it off. We paid off one card we had used to live on when bringing in not enough income in real estate and the credit card company charged us $65 fee on $5 that was supposedly left over on the card, even though they had given us the exact amount to pay off. We got them to remove the fee and paid the $5 but it was extremely difficult. This is AWESOME and I can't wait until it takes affect. I can't believe they are waiting until 2010!
ilanac13 ilanac13 8 years
well i think that this could be something good for people now that are trying to build up their credit. i hope that this makes a positive impact on the economy - we'll just have to see over time if people are able to be more responsible and some how manage to dig themselves out of debts etc.
Spectra Spectra 8 years
Now that I read through these again, I'm pretty glad they're getting rid of 2-cycle billing. That's a pretty sneaky little trick on their part. And having a little longer to pay would be time, we were out of the country for a few weeks and we forgot to pay the bill before we left. I think we paid it 1 day late and they hosed us with the late fees. I even called them to explain and they still said it "wasn't a valid excuse". Yeah, sometimes credit card companies can be total douchebags.
shydcgirl28 shydcgirl28 8 years
Granted that not all in debt are irresponsible, I will give you that. However, I am talking about a pretty specific group, those who are in fact irresponsible and intentionally create bills that they have no idea of how to pay later on because delayed gratification is such a foreign concept. @Spectra & Lady Angel - I do agree that the legislation is necessary b/c most facets of the financial markets need honest oversight. I think it's a win for the consumer, which is fantastic. That said, if you apply for a secured card that charges you fees in the amount of the credit limit, where it specifically states in the terms, that they are entitled to do this to offer you credit, who then is being screwed? That person does have a choice, and to choose to pay those fees is what many do, to be able to have a coveted credit card in their wallets.
LadyAngel89 LadyAngel89 8 years
Well in a perfect world we would be debt free. Try making less than 300/wk after taxes. I can't justify having a great deal of debt, but I certainly don't like getting screwed by credit card companies when I'm making payments but they decide to raise my interest rate or change my due date and I get the letter the day its due. I like being able to have my card. While you certainly shouldn't buy everything on credit, not everyone can stay debt free. All people in debt are not irresponsible, and you can pin irresponsibility to just about every activity on earth.
Spectra Spectra 8 years
I totally agree with you, dcgirl28. I also think it's a little ridiculous that the CC companies need to babysit people to get them to be responsible with their payments. But in the end, if it helps the rest of us out by decreasing our interest rates and decreasing the number of people who default on credit cards they can't pay off, I guess it's probably not a bad idea overall. I am totally mystified by people who rack up thousands of dollars in debt and are looking for ways to settle their debt for WAY less than they owe. It's so completely rang up all that debt, you pay it off.
shydcgirl28 shydcgirl28 8 years
Honestly?? How do you run up debt that you know you cannot pay back? I don't care if the POPE, the Dali Lama, Buddha, and Michelle Obama convinced you that you "needed" those Chloe shades and purple gecko-skinned Laboutins, and you should buy them on credit. If you bring home $600/wk-after taxes, and you aren't being subsidized in any other way, how exactly do you justify having $10,000 in debt that doesn't include school loans, a car note, or a mortgage?? We have become increasingly and alarmingly irresponsible, and having to have the government step to handle our affairs, just seems to amplify the issue. All we are doing is raising and enabling another generation of brats who have no clue about responsible financial practices. You know what you can and cannot afford, live within your means. Period. Off my 32-yr old, debt-less, soapbox now.
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