Credit Card Review Blog

Banning Unfair Credit Card Rules

Finally…some good news for the American consumer. Federal regulators have agreed and adopted a new set of rules for the entire credit card industry. These new rules will help protect consumers from interest rate increases, unfair due dates and more.

There is a downside though. The new rules won’t take effect until July 2010. However, there are only a certain things a credit card company can do until they. They can raise interest rates, though only on new credit cards. Similarly, they can raise the interest rate on future purchases or cash advances, instead of on current balances.

The rules are a monumental feat for consumers. They mark the largest “clampdown” on the entire credit card industry in decades. The Office of Thrift Supervision has already approved the regulations. The Federal Reserve and National Credit Union Administration already voted about this.

Federal Regulators hope that the new rules will “enhance public confidence in financial institutions and establish a level playing field for institutions that want to do business fairly without suffering competitive disadvantages.”

The new rules would completely prohibit:

-Making deceptive offers of credit

-Placing unfair time constraints on credit payments. A payment could not be deemed late unless the borrower is given a reasonable period of time, such as 21 days, to pay.

-Unfairly adding security deposits and fees for making credit available or issuing credit.

-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.

Consumers will also have to be given 45 days notice before any changes can be made to the terms of the credit account. This includes increasing a penalty rate for missed or late payments. Current rules specify that a 15 day notice must be given to the customer before any changes can be made.

There is finally some good news in the forecast for American consumers. Credit card companies will no longer be able to take advantage of these consumers. The regulations are a bit of welcome news for millions of people around the country.