Despite credit card reforms that are scheduled to take place in 2010, Congress has passed a new reform bill that addresses many unfair and deceptive practices perpetrated by credit card companies. Some of the key components:
Creditors cannot increase the annual percentage rate (APR) during the first 12 months of opening up an account.
Creditors are required to provide consumers with a 45-day advance notice of changes in rates and significant contract changes.
Credit card issuers are prohibited from charging a finance charge based on double billing cycle methods.
Creditors are required to provide a grace period for payments.
Creditors are prohibited from opening a credit card account for any college student who does not have any verifiable annual gross income or already maintains a credit card account with that creditor.
Not surprisingly, credit card companies are not happy with having to show some accountability. They much prefer their current carte blanche status. But don't cry for them. They've already laid out their new plans for going after those with great credit by adding or increasing annual fees, cutting or eliminating cash back and reward programs, and charging interest immediately on a purchase instead of allowing a grace period. I mean, why should credit card companies have to take a hit after decades of abusive practices?
1 day ago