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Personal Finance -
Credit Cards
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Written by LiveCheap.com
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Tuesday, 01 December 2009 21:49 |
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The Following is a Summary of the new credit card law that is effective February 2010.
Interest Rate Changes:
- Minimum of 45 days after notification received before rate change takes effect
- Will not apply to existing balances as of the effective date
- Cardholder can cancel: rates and minimum payments are frozen upon cancel
- Cancellation cannot lead to declared default with balance due immediately
Interest and Fees:
- Eliminates Double-Cycle Billing
- If a partial payment is made on balance, it is not subject to interest charges
- Consumers can opt-out of paying over-the-credit limit fees and limits them to 1 per billing cycle
- Over limit and currency exchange fees need to be reasonable
- The term “fixed rate” can only be used when applied to a specific time period
Payments:
- Are considered paid if received by 5PM
- Payments apply to highest interest rate first until exhausted, then next highest
- Are due a minimum of 21 days from the date bill sent
- Payments received at a local branch of a credit card issuer are considered paid the day that they are received by the branch
Rate Increases:
- Can happen when a promotional period expires, not to be less than 6 months
- Can happen when a variable rate whose underlying index has changed
- Cannot happen based on credit information on other debts
- Must be returned to original rate if consumer pays on time for 6 months
No Credit Cards Issued to those under 21 unless they:
- Have a parent/guardian that is capable of paying for the card co-sign
- Have the demonstrated financial means themselves to pay
- Have completed a financial literacy course designed for the young.
- No University/College Affinity cards that don’t meet above criteria
Gift Cards/Certificates
- Eliminates dormancy fees except where balance under $5; limited to $1 per month
- Minimum 5 year expiration if stated clearly upfront
Also creates a Credit Card Rating System with a 5 star rating system to evaluate the likelihood of consumers getting into trouble with specific cards
Source: Credit Card Accountability Responsibility and Disclosure Act of 2009
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