New credit card protections are the law today

by Norma

Ready, Set, Charge!

Credit card issuers now come under the Credit Card Accountability, Responsibility and Disclosure Act—or Credit Card Act that goes into effect today. The law creates sweeping consumer protections and reigns in industry profits, maybe. The new regulation limits interest rate hikes, requires companies to send bills earlier and apply payments to balances more fairly–they can no longer apply payments to the lowest interest portions of a bill first. Before you charge out to rack up your card balance, check into what the new law does and doesn’t do to protect you.

  • The Orange County Register gives a more comprehensive report on the consumer protections, history and impact of the new rules. “Charrrrge it,” reads the headline.
  • National Public Radio tells us, “The new regulations ban banks from things like suddenly shifting the due date for payments or imposing surprise interest-rate hikes,” and that, “…card issuers are already devising new ways to introduce fees and interest rate changes.”
  • The AARP warns that, “In an unusual move, credit card providers are going after good customers, those who pay every bill in full and on time. Customers who use their cards rarely or not at all are also being hit with new fees.”
  • According to CNN Money, if you think the new regulations can protect your business credit cards, think again. The new regulations won’t be there for the small business owner according to this article from CNN Money.

While the regulations end some unfair practices, everything I’m reading warns that the card companies have already put into place ways to replace any reduction in their revenue. The same consumers as always will be paying as much as ever, just under a new guise. In other words, the card companies have had months to make sure that the only thing they change is the name of the fees and fines they will be demanding from you.

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