New credit card rules

There are several regulatory bodies involved, but it appears that new, more consumer-friendly rules will be applied to credit card issuers.  Unfortunately they will not take effect for more than a year.  The most important ones are these:

1.  Credit card companies will no longer be able to raise your interest rate on current balances unless you default on your payments to them.  Right now, if you’re late paying, say, your utility bills, the credit card company can raise the interest rate they charge you on all of your current balances with them.  (They will still be able to raise your rate on future charges if they want.)

2.  When you make a payment, the credit card company will have to apply anything over the minimum to the balances with the highest interest rates. So, if you took out cash using your card, and got charged a higher rate of interest on that balance (which is common), the credit card companies can no longer apply your payment to balances with lower interest rates first.

3.  You will have to be given at least 21 days to pay your bill.

4.  If you pay down your balance to zero one month and do not do that the next month, the credit card companies will no longer be able to use “double cycle billing” which, in essence, charges you interest on the entire two-month total.

It’s a step forward.  Too bad they left out rate regulation.  Credit card companies will still be able to charge you confiscatory rates if they want.  I have seen rates as high as 35%.

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