I wrote an article in December 2008 about the proposed Credit Card Law changes called, “New Credit Card Rules Passed – In Law July 2010″. The intent of these laws is to better protect consumers from the unscrupulous practices of banks. These laws are a big step in the right direction for better protecting the consumers although the Banks are not going quietly. They are cutting credit lines and raising rates before being forced to follow the new laws. The legislation is good but because the laws are being phased in we the consumer will continue to get abused. Yes, if you do not carry a balance it is all irrelevant but many of us have balances we are paying off. Here are the landmarks:

Starting August 2009

• Banks must send statements at least 21 days before bills are due. Currently the requirement is 14 days. Ever wonder why it seems like you just got your bill and its already due?
• Banks must give 45 days notice before increasing interest rates and / or fees. The current requirement is 15 days.

Starting February 22, 2010

• Banks can not raise rates on an existing balance, unless payment is more than 60 days late or a teaser / intro rate expires.
• Banks cannot offer teaser / intro rates for less than a period of six months. This is good because banks have made a lot of money getting people to jump from offer to offer making them rich off the balance transfer they probably hit you with.
• Banks cannot raise the rates on new purchases in the first year, unless it is due to an expiring teaser / intro rate.
• You must be 21 to apply for a credit card, otherwise you will now require a co-applicant unless you can show proof of income. This of course aimed at reducing the number of kids coming out of college with significant debt.
• Banks are no longer allowed to use the infamous “universal default” policy, which is when they raise your rate because you were late on another account.
• Banks must now apply payments over your minimum due to the highest APR balance first and then to any remainng balances in descending order of interest rates from highest to lowest.
• Banks must now disclose on your statement how long it will take to pay your current balance and the total associated interest if you make only the minimum payment.
• Banks can no longer allow you to charge over your limit and hit you with fees for doing such unless you opt in, giving them permission to allow you to exceed your credit line. You of course would be very unwise to do so.
• Banks can no longer perform what is termed “double cycle billing”. This is when the Bank calculates finance charges by averaging in daily balances from the previous cycle in a addition to charging finance charges for the current billing cycle.
• Another rule to protect our youths prevents Banks from offering sign-up gifts on or near college campuses.

Starting August 2010

• Saving the best of last of course. If you have been late on payments for a card and your interest rate has been increased as a result, banks at your request must reduce your interest rate to the pre-penalty rate if you make six months of consecutive on-time payments.