Credit-card changes dictated by federal regulators were supposed to take effect by the end of the year. They didn’t. The feds have now given credit-card companies (that weren’t too pleased with the changes anyway) a year and a half to get ready.
Here are some of the changes that will take effect in the summer of 2010:
• If your interest rate goes up, the card company will no longer be allowed to impose that higher rate on pre-exiting balances –– unless a payment is more than 30 days late.
• When you open an account, your interest rate will be disclosed to you, and the card company will be required to honor that unless your payments are late.
• No more universal default. If your credit score plunges due to not paying a different debt, the card companies can no longer raise your rate because of your payment record to others.
• If you have both purchases and cash withdrawals on your credit card at different interest rates, the banks will no longer be able to apply your payment only to the balance with the lowest rate while the other balance continues to accrue higher interest. Any payment amount over the minimum will be applied to the higher interest balance.
• There will be no more arbitrary middle-of-the-day cutoffs to accept payments. If a payment is received by 5 p.m. on a given day, it’s considered as being received that day.
• If there are to be changes to your account, you must receive 45 days notice.
• You must be given an adequate amount of time (21 days) to receive and pay your bill.
• There will be no more two-cycle billing, where card companies have gone back to ding you with interest on the same amount a second time.
Suggestion: Use 2009 to get organized so that you’re never late on a payment again. Make more than the monthly minimum payments and get the balances paid off as soon as possible. Don’t give the card companies any reason to use their remaining loopholes to raise your rates. There’s a good chance that more people are going to be denied credit, as the card companies won’t be able to make as much money with questionable practices.
Uffington does not answer reader questions individually, but will incorporate them into his column whenever possible. Write to him in care of King Features Weekly Service, P.O. Box 536475, Orlando, FL 32853-6475, or send e-mail to email@example.com.