Credit Card Act 2009 Takes Affect Today
Finally, some relief will be heading your way. If you’re in debt and trying to figure out which path to take, the federal government has attempted to relieve your stress. A few months back, President Obama singed the Credit Card Act, putting into legislation a strict attempt to alleviate the pressure that credit card companies place on consumers.
Starting Thursday, credit card companies must send out statements a full 21 days before payment is due. They must also send out notices 45 days in advance of rate increases, and give options for consumers who can’t afford the new rate hikes. In addition, credit card companies will no longer be able to raise rates or penalize consumers after late payments or exceeds a credit limit without giving notice.
An extremely positive new page in the Credit Card Act 2009 requires credit card companies to give consumers the option to remain at their current interest rate and slowly pay-off their balance when a rate hike is on the way. You may have noticed that during the past few weeks your credit card company has raised you rates a bit. This is because they’ve all been preparing for this day and for the Credit Card Act 2009 to kick in, because now you have the right to refuse to pay the new rates and choose to pay-off your balance with your old rate.
However, until February 2010 credit card companies can raise rates to whatever they like. There is not yet a cap on interest rates, which means either you pay-off your credit card at the old rate, and take option A, or you can tough it out and pay the new rates, option B. In February of next year, the part of the Credit Card Act 2009 that requires interest rate caps will kick in, limiting what credit card companies can charge you each month in interest.
The loophole to this legislation is that many credit card companies have switched their fixed rate customers to variable rate ones in order to go around the Credit Card Act. As of today, any fixed rate customers must get the rate hike warning, however, if you hold a variable rate card they are not required to warn you about hikes.
Credit card companies are doing whatever they can to make this process hurt everyone. They have already begun to lower credit limits, tighten approval requirements, and toss out certain card holder privileges and perks. They are also claiming that available credit will decrease, and the cost of borrowing will increase, since they will now have to be more careful about whom they approve.
Word to the wise; check your credit card statements closely. If you haven’t in the past month, you might see some new things on there. Give you credit card company a call and discuss the new changes with them. And if you’re in debt and looking to get out, check out http://www.thedebtsettlementprogram.com.
