Many of us have been hearing about new rules regarding credit cards. It is very important to be clear about what this will mean for each of us who use them.

Many thanks to LeAnne Ozaine Smith of Spend On Purpose, who was kind enough to share the following list translating what the new rules are into language we all can understand.

Check her out at www.spendonpurpose.com

 

 
1.  Credit card statements must be mailed 21 days before the bill is due (this is an increase to protect consumers from the previous law of 14 days)
 
2.  Effective August 2009, credit card Issuers must give Consumers 45 days notice before increasing interest rates, fees, and terms on a card (vs 15 days).   However, the clincher is that there is no standard in the legislation about how an Issuer informs the Consumer about changes; so every Issuer can notify as they please.
                                                           3.  Starting in February 2010, Issuers cannot raise interest rates on EXISTING balances (unless the account is 60 days late).  Bingo! This is why credit card Issuers are raising rates on existing balances while they still can.   
4.  If you make a payment in excess of the minimum, the Issuer must apply it to the balance with the highest interest rate and then to the other balances, from highest to lowest. (effective Feb 2010)
 
5.  If you have two accounts with the same Issuer, they can no longer practice "universal default."    This means that if you are late in making a payment in one account, they can't raise the rates on the other.
 
6.  Starting February 2010 credit card statements must indicate (a) how long it will take to pay off if you only make the minimum payment (b) the total cost of payoff  if you only make minimum payments.  Issuers hate this one, because it shows the real cost of unpaid balances.
 
7.  Applicants under age 21 will not require an adult co-signer  and/or proof of income for approval;  additionally the legislation prevents Issuers from offering incentive gifts for applicants on or near college campuses.
 
Regardless of the improvements in this Legislation, it is still your responsibility to manage your credit  score and the open lines (both business and personal) you carry.  Remember, high interest rates can decimate your profit in business.   This might be a good time to shop around for decent balance transfers. 
There's never been a better time to start actively putting every cent your business makes to good use. 
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