New Credit Card Rules Go into Effect Next Week

Beginning Monday, the Credit Card Accountability, Responsibility and Disclosure Act will go into effect, reforming the rules regarding credit cards and interest rates for millions of Americans. The goal of the new regulations is to protect consumers from abusive and exploitative practices by credit card companies.

All of the changes are intended to make consumers more aware of their financial situation, allow more flexibility in making monthly payments, and ease the burden on the millions of American families who are buried in credit card debt.

Among other things, the new regulations require credit card companies to:

Collect individual payments on the same day each month;
Make the bill itself more transparent by including how long it will take to pay off the balance by making minimum payments each month;
Deliver credit card bills at least 21 days prior to the due date, an increase of seven days.
Give customers 45-day notice if their interest rates or fees are going to go up. Credit card companies are forbidden from raising interest rates in the first year after an account is opened;
Allow credit card holders who pay their bill at the higher interest rate on-time for six months to have their interest rate set back to the regular rate;
Put a cap on annual and application fees; and
Verify that consumers under the age of 21 can make payments or have a co-signer.

The Leadership Conference on Civil and Human Rights