Credit card interest rates going up as new rules start to restrict actions by credit card issuers

Average credit card interest rates rose to 14.43% in May according to the Federal Reserve as credit card issuers get ready for the new rules from, the Credit Card Act of 2009 taking effect starting this Thursday and running into next year.

As of Thursday (8-20-09) credit card companies are required to put their bills to you into the mail at least 21 days before the due date, a week longer than the previous regulation called for.

They must also give you at least 45 days notice before making a “significant” change to their rates or fees.   (That’s why they’ve been raising their rates now, before this rule goes into effect.)

And, perhaps most important, credit card companies can no longer increase fees or rates without warning when you miss a payment or exceed your credit limit.

As of next February (2010) more provisions will take effect; the most important of which will limit the ability of credit card companies to raise interest rates on existing balances.   So, if you have a balance of say $1,000 at one interest rate and they give you 45 days notice that they are going to raise your interest rate, most of the increased rate will apply only to new balances.

Before next July the Fed will release more regulations restricting credit card company activities.

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