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Starting in February

Starting in February

 

            After years of consumer complaints, new legislation governing card cards will go into effect February 22.  Most credit card companies have already sent out notices of those changes.  Be sure to read the fine-print of those notices.

Some of the new “can’t s for credit card  companies include:

  • Raise rates on a new card its first year
  • Raise interest rate terms on existing balances if you pay on time.
  • Sign up a 18- to 21-year-olds a card without seeing ability to repay or a co-signer.
  • Count payments late anymore because of early afternoon cutoff times or holiday and weekend interruptions of payment processing.
  • Charge fees when the card company approves charges above a customer’s credit limit.
  • “Double-cycle billing” and “universal default” practices, which allowed companies to collect dramatically more interest, will no longer be permitted.

On the other hand, credit card companies can:.

  • Raise your interest rate without notice if you are 60 days late.
  • Charge more on variable-rate cards if general interest rate levels rise. ..
  • Add new fees such as inactivity or low-use fees.
  • Add a penalty interest rate on existing balances if a customer falls at least 60 days behind on payments.
  • Levy late fees quicker than that. Neither requires a 45-day notice, and the customer can’t reject them.
  • When a low promotional or intro interest rate ends, the interest rate may go up without notice or the right to reject it.

Card companies will still be able to charge higher interest rates on future credit card purchases by giving the customer 45 days notice. And there still is no limit on how high the interest rate on a credit card can go.

 

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