Restrictions on Credit Card Companies - What Fees and Penalties Do I No Longer Have to Pay?
Every year, the new credit card laws are introduced; new policies are made to provide comfort to those people who are using these credit cards a lot.
But, every year rile are being changed for different reasons.
This year, the new credit card laws have been introduced.
From February 2010, the banks will need to abide by the new regulations on terms and disclosures.
The idea behind the landmark law was to prevent the banks from such practices that often indulge the borrowers deeper into debt.
Interest rate on the existing balances is allowed only under limited conditions, such as when a promotional rate ends, there is a variable rate or if the cardholder makes a late payment.
Universal default is the practice of raising the interest rates on the customers, based on their payment records with other unrelated credit issuers (such as utility companies and other creditors) and has ended for existing credit card balances.
Consumers now have the right to opt out or reject certain significant changes in the terms of their accounts.
The card issuers are banned from issuing credit cards to anyone under the age of 21; unless they have adult co-signers on the accounts or can show proof that they have enough income to repay the card's debt.
Under the credit card law, the issuers have to give card account holders "a reasonable amount of time" to make payments on the monthly bills.
That means, payments are due at least 21 days after they are mailed or delivered.
The Credit card issuers are no longer able to set early morning or other arbitrary deadlines for the payments.
When the consumers have accounts that carry different interest rates for different types of purchases (i.
e.
, cash advances, regular purchases, balance transfers or ATM withdrawals),the payments with the minimum amount due must go to balances with higher interest rates first.
The Consumers must "opt in" for over-limit fees.
Those who opt out would have their transactions rejected, if it exceeds their credit limits, thus, avoiding over-limit fees.
Fees charged for going over the limit must be reasonable.
Finance charges on the outstanding credit card balances must now be computed based on the purchases made in the current cycle rather than going back to the previous billing cycle to calculate the interest charges.
But, every year rile are being changed for different reasons.
This year, the new credit card laws have been introduced.
From February 2010, the banks will need to abide by the new regulations on terms and disclosures.
The idea behind the landmark law was to prevent the banks from such practices that often indulge the borrowers deeper into debt.
Interest rate on the existing balances is allowed only under limited conditions, such as when a promotional rate ends, there is a variable rate or if the cardholder makes a late payment.
Universal default is the practice of raising the interest rates on the customers, based on their payment records with other unrelated credit issuers (such as utility companies and other creditors) and has ended for existing credit card balances.
Consumers now have the right to opt out or reject certain significant changes in the terms of their accounts.
The card issuers are banned from issuing credit cards to anyone under the age of 21; unless they have adult co-signers on the accounts or can show proof that they have enough income to repay the card's debt.
Under the credit card law, the issuers have to give card account holders "a reasonable amount of time" to make payments on the monthly bills.
That means, payments are due at least 21 days after they are mailed or delivered.
The Credit card issuers are no longer able to set early morning or other arbitrary deadlines for the payments.
When the consumers have accounts that carry different interest rates for different types of purchases (i.
e.
, cash advances, regular purchases, balance transfers or ATM withdrawals),the payments with the minimum amount due must go to balances with higher interest rates first.
The Consumers must "opt in" for over-limit fees.
Those who opt out would have their transactions rejected, if it exceeds their credit limits, thus, avoiding over-limit fees.
Fees charged for going over the limit must be reasonable.
Finance charges on the outstanding credit card balances must now be computed based on the purchases made in the current cycle rather than going back to the previous billing cycle to calculate the interest charges.
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