Credit Card Reform Passes Congress with a Surprise Amendment
May 21, 2009
Credit card reform appears close to a reality now that both the House and Senate have passed a final version of the bill. The credit card industry can expect new regulations as soon as next week, when President Obama is expected to sign the bill into law. The credit card reform bill did not make it through the Senate without a shocking amendment added to the House version. The ability to carry concealed weapons in national parks was the concession made to Senate Republicans and the strengthening gun lobby in the United States. Guns in Yellowstone apart, the credit card bill is consumer-friendly. Some of the new rules that credit card companies will have to follow include:
- Rates, terms, and card changes must be easy to understand and available for review
- No rate increases on existing balances unless the account is 60 days past due.
- Rate increases for new balances require a 45-day notification period.
- No cardholders under the age of 21 unless a joint account is opened with a consenting adult
- No fees for exceeding a credit limit unless authorized by the cardholder
- Interest rates cannot be raised within the first year after a new credit card account is opened
- Credit card bills must be sent at least 21 days before the due date of the bill
The banking industry is howling over the new legislation, but the changes are not a surprise. Americans overextending their credit cards has been a big problem in this country and one that banks and credit card companies have taken advantage of. While predatory credit card practices may be reeled in, banking lobbyists claim that credit card rates and fees will be forced higher to compensate for the lost revenue. Don't count on it, credit card deals will still be around. So while your local bank may charge you higher rates of more fees, as long as you use a site like MoneyRates.com or Cardratings.com you can stay on top of the latest credit card deals available.