Good News- Bad News on New Credit Card Laws!!

Which news is usually easier?

Good or bad first – ok I’ll start with the good;

Good: The Federal Reserve Board and two other organizations recently issued new rules changing some of the less consumer-friendly practices.

Bad: The rules don’t go into effect until July 2010.

Here is a rundown of what is changing:

Interest Rates:

Now:  Banks can increase your rate on the entire balance at any time, for any reason with 15 day’s written notice.
As of July 2010, Cannot increase rate on existing balance of you pay on time.
Must give 45 day’s written notice to increase rate.

Late Payments:
Now:  Can hit you with a fee if you’re even 5 minutes late or got the statement yesterday.
As of July 2010: Cannot assess a late fee unless you’ve had at least 21 days to make a payment.

Allocating Payments:
Now:  Typically payments are applied to your balance with the lowest interest, even if you pay more.
As of July 2010:  If you pay more than required, it must be applied to the balance with the highest interest rate, or spread proportionally.

Two-Cycle Billing:

Now:  Use paid-off balances from prior months to determine your current finance charge.
As of July 2010:  Practice banned!

Sub prime Credit Cards:
Now:  Security and opening fees for people with low credit scores can be as much as the credit limit on the account.
As of July 2010:  Security and opening fees for people with low credit scores cannot exceed half of the initial credit limit.

To find competing offers for your cards with lower rates go to or or

Deb Whitney