What do the new credit card rules mean to you?Posted: Updated:
PHOENIX - New protections go into effect on Monday for credit card users.
President Barack Obama signed the law last spring and credit card companies had most of the year to prepare.
For some these new laws could be a mixed blessing. Although there are many benefits to the new protections, there are a few drawbacks as well. Nevertheless one thing is for certain, you will definitely know where you stand when you receive your next statement.
You can take a look at a mock-up of what your next statement will look like by going to the Federal Reserve website.
Statements will also be more detailed, as part of the new credit card law.
Mike Sullivan, with Take Charge America, says, “It forces them to communicate more openly. People are going to understand what’s involved.”
Under the new law it will be more difficult for card issuers to raise rates but if you are at least 60 days late on a bill you should be worried.
Sullivan explains, “The law does not restrict what interest rates will be. They can increase to virtually anything but they have to give appropriate notice now.”
Another change for consumers will be the minimum payment warning that will let you know just how long it will take you to pay your balance off.
For example if you have a balance of almost $1,800 and you only make the minimum payment, it will take you 10 years to pay down.
It also shows that just by increasing that minimum amount by $9 you can pay it down in three years.
Sullivan says, “Our hope for this law, consumers being better informed.”
The new credit card law will cost banks billions of dollars up until this point. Credit card companies had nine months to prepare for the new rules and took action by creating new fees, cutting, and even completely eliminating some credit lines. Other revenue-generating methods are expected to continue.