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Barack Obama announces new credit card restrictions

By Jane Fazackarley     May 22, 2009 in Business
Barack Obama signed a new bill today which was aimed at credit card companies. The new laws will stop them from increasing interest or charging some fees.
The bill has been drawn up to stop credit card owners from having to deal with additional fees or having their interest rate fess hiked up unexpectedly.
A few of the big name credit card companies have spoken out saying this may cut down on the credit limit being offered to some customers.
This is because the newly introduced legislation has made it harder to set interest rates by the credit risk some customers might present.
It has been reported that, between them,people in the United States owe around $1 trillion on credit cards alone.
The United States government had been keen to toughen up the rules for the financial system following the credit crunch and the subsequent banking crisis.
This new law is being dubbed a 'Bill of Rights' for credit card holders. Some of the new laws will include steps to stop credit card companies from increasing rates of interest in the first year. Credit card companies will also not be able to add fees for customers going over limit. Customers must also have 45 days notice if rates are to go up and penalty fess have to be fair. These are just a few of the new rules.
Customers who are a month behind with their payments can still be charged an increased interest rate.
Barack Obama said:
"With this bill we are putting in place some common sense reforms designed to protect consumers,"
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