CARL WATTS & ASSOCIATES
April 26, 2010
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Washington DC
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tel/fax 202 350-9002 |
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The CARD Act or the credit card reform law has brought a lot of changes in the way card companies are expected to treat their customers, and most of the new rules are designed to be more consumer-friendly and protective.
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You can find here the major changes in the CARD Act, but if you prefer to talk to a real person (other than us:-) then bear in mind that card companies now have to print on their statements a toll-free number consumers can call for non-profit credit counseling.
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 Also make sure to read everything that comes from your creditor and remember that
the new rules do not apply to business cards or charge cards.
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Interest rates could be changed at any time even if the payments wereon time
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No interest rate increase is allowed in the first twelve months after an account is opened except for an introductory ratecoming to an end.
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After that a 45-day notice must be given in advance of any rate change or any other significant change to the credit card terms.
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The minimum promotional rate period is of six months.
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The interest rate can go up because of 60 days late payment, but if the next six month minimum payments are made on time,the original rate must be reinstated
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Agreement terms were difficult to understand; rates, fees and penalties were hard to find
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Statements must include information on how long it will take to pay off the balance with minimum payments and the total amount you’ll have to pay including interest and principal.
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Activation & annual fees cannot exceed 25% of the initial credit line.
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Double-cycle billing is no longer allowed(interest must be calculated for the current cycle only).
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Statements were sometimes sent not long before payments were due and due dates could be changed from month to month resulting in late fees or interest charges
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Statements must be sent out 21 days before the payment due date, which must be thesame date each month.
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Payments must be made by 5 p.m. on the due date or the next business day after weekends and holidays.
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Banks allowed charges to exceed credit limits setting very high over-the-limit fees.
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There are no over-the-limit fees unless the customer has specifically agreed to permit such transactions. |
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Credit cards were handed out easily, without checking the applicant’s sources of income
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Applicants under age 21 can get a credit card only if they have a co-signer or can show proof of independent means to repay the debt.
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Credit Cards
New Rules & Regulations
New Rules & Regulations
| STILL VALID |
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The card issuer does not have to notify you of any changes to the interest rate if you have a variable rate card. |
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Banks can still close accounts or lower credit limits without notice. |
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More changes are expected to take effect in August so please keep in touch!
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