WISCONSINREPORT.COM (02/22/2010) - New federal regulations for consumer credit cards are now in effect. Lawmakers hope the new rules will be beneficial to consumers who have been having a rough time trying to meet all of the past requirements, fees, and interest rates that have been thrown at them. Congressman Steve Kagen, M.D., is among those praising the implementation of the CARD Act, which protects consumers by banning unfair credit card interest rate hikes and forbids abusive fees and penalties.
"For too long Wall Street financial wizards have had the upper hand, but that begins to change today," said Wisconsin Congressman Steve Kagen.
"People should not have to choose between feeding their family and paying sky-high interest rates to credit card companies," Kagen added.
"I fought hard for these protections that begin to give working families an even break," Kagen said.
The new "Credit Cardholder’s Bill of Rights" was signed into law on March 22, 2009 and began to take effect in August of last year.
Today, the law will begin to ease the burden on middle-class families.
Among other consumer protections included in the new law are the right to refuse to accept rate hikes and the opportunity to pay off existing credit card balances at the old rate.
Credit card companies are required to give 45 days’ notice of any rate increases on new purchases.
If a consumer receives notice of a rate hike, they can now simply notify the card company that they reject the rate hike and want to close the account.
Additional provisions included today (Feb. 22, 2010):
- Companies must provide notice of any rate hike or change 45 days in advance.
- Account statements must be sent 21 days in advance of the payment due date.
- Interest rate hikes on existing balances are prohibited, only on future purchases.
- Penalty rate increases for payments less than 60 days overdue are banned.
- Charging interest on debts paid on-time is banned.
- "Due-date" gimmicks such as setting morning times for payments, before mail is delivered or charging fees for paying a bill by phone or internet is banned.
- Requires promotional rates to last at least six months.
- Consumers under 21 must demonstrate an ability to pay or have a parent co-sign to be eligible for a credit card.