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article imageNew credit card rules coming in February

By Owen Weldon     Jan 10, 2010 in Business
Most consumers use credit cards because it seems to be the norm now a days but they can cost users a lot of money in fees and interest if they do not understand a credit card's terms and conditions.
last summer congress passed the credit card act which placed new rules to benefit the consumer. now there are more changes on the way according to Eileen St. Pierre, Oklahoma State University Cooperative Extension personal finance specialist.
St. pierre said that the biggest changes made last summer was making creditors provide written notice to consumers 45 days in advance before increasing interest rate or making a significant change to the account terms. the consumer has the right to cancel the credit card before the change or increase goes in effect. Credit card companies must now allow at least 21 days between the time a statement is mailed and when the payment is due.
Most of the provisions will take effect Feb. 22. Also consumers who carry a balance, credit card companies must first apply payments to the balances that carry the highest interest rate. there will no longer be double-cycle billing. if a consumer's rate was raised because they were making late payments, the rate will revert back to the original rate if they make the next six monthly payments on time.
Credit card statements are going to look very different in the near future with monthly bills including an estimate on how long it will take to pay off the bill if you make the minimum payment. Also there will be a year-to-date summary of overdrafts, fees, and interest so consumers can see what the credit card is really costing them. Terms and conditions will be on the front of the bill when changes are made to them.
This is very good news for consumers but now credit card companies will find new ways to make profits like they used to make in the past. For many consumers the days of no annual fees might be gone and credit card companies may impose a fee for customers who do not use their card or if they do not charge a minimum amount per year.
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