Credit-card companies are scrambling fast and furious to get every dollar they can before new credit regulations take effect.
If you get a leaflet in your next credit card statement, read it. That information (which is required to be sent to you) is to let you know what is changing on your credit-card terms. Sit down with a red pen, read every single word and underline the important parts.
Changes described in those leaflets include:
• Less time to make your payment. The number of days to make your payment could be reduced, so be sure to mail it at least seven days before it’s due. (The new regulation will require that statements be mailed to consumers at least 21 days in advance.)
• How your payment will be allocated. If you have both cash advance and purchases on your card, beware of any notification saying that the one with the lower interest rate will be credited first — while the higher interest-rate balance keeps accruing. (The new regulation will require that money be applied to the higher interest-rate balance first.)
• Your interest rate could go up. This is where we’re seeing some dramatic increases in the leaflets. Not only are rates going up on new purchases, but on your existing balances as well. (The new regulation will ban credit-card companies from changing your rate on existing balances unless you’ve been late with payments.) Additionally, they won’t be able to tack new fees onto existing balances.
• If you have a new card and are counting on introductory rates (perhaps to pay off a major purchase you made when you got the card), your rate could change before you get to the end of the introductory period. (The new regulations will ban this practice and require promotional rates to remain in effect for six months.)
The Credit Cardholders’ Bill of Rights Act of 2009 won’t take effect for one year after becoming law. That’s a long, long time for the credit-card industry to play fast and loose.
Lenders do, however, have to keep sending those leaflets when they intend to make changes. That’s going to be your only warning of changes to your account. So, keep your red pen handy.
Uffington does not personally answer reader questions, 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 columnreply@gmail.com.
If you get a leaflet in your next credit card statement, read it. That information (which is required to be sent to you) is to let you know what is changing on your credit-card terms. Sit down with a red pen, read every single word and underline the important parts.
Changes described in those leaflets include:
• Less time to make your payment. The number of days to make your payment could be reduced, so be sure to mail it at least seven days before it’s due. (The new regulation will require that statements be mailed to consumers at least 21 days in advance.)
• How your payment will be allocated. If you have both cash advance and purchases on your card, beware of any notification saying that the one with the lower interest rate will be credited first — while the higher interest-rate balance keeps accruing. (The new regulation will require that money be applied to the higher interest-rate balance first.)
• Your interest rate could go up. This is where we’re seeing some dramatic increases in the leaflets. Not only are rates going up on new purchases, but on your existing balances as well. (The new regulation will ban credit-card companies from changing your rate on existing balances unless you’ve been late with payments.) Additionally, they won’t be able to tack new fees onto existing balances.
• If you have a new card and are counting on introductory rates (perhaps to pay off a major purchase you made when you got the card), your rate could change before you get to the end of the introductory period. (The new regulations will ban this practice and require promotional rates to remain in effect for six months.)
The Credit Cardholders’ Bill of Rights Act of 2009 won’t take effect for one year after becoming law. That’s a long, long time for the credit-card industry to play fast and loose.
Lenders do, however, have to keep sending those leaflets when they intend to make changes. That’s going to be your only warning of changes to your account. So, keep your red pen handy.
Uffington does not personally answer reader questions, 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 columnreply@gmail.com.