On Tuesday, the US Senate passed new legislation regulating credit card companies. This new bill contains many restrictions in an attempt to protect “naive” consumers. A clear and concise summary was written here. So what regulations were put into place?
First, banks must wait 60 days before they can charge you interest for lack of a minimum payment. Honestly, I think that’s a pretty generous allowance to wait for a payment. I think 30 days should be a sufficient amount of time for anyone to make a payment. I believe that giving people 60 days might actually cause people to deliberately charge items and then say “I’ll pay it off before the interest begins to accrue.” Second, Credit Card Companies will need to give consumer 45 days notice before raising rates. This is definitely a reasonable request, although I wonder if people really stop charging just because their rates are going up?
Third, CC must send statments out 21 days before the due date. I can attest to the fact that CC companies try to send the statements as late as possible. I always get an electronic statement because waiting for the hardcopy just doesn’t cut it. Fourth, no late fees on your payments. If you send it within the 60 days. They also have to do away with due dates on the weekends being late if the payment gets there Monday.
Also, banks need apply payments to the highest interest charges. They can’t play the game where they apply it to the lowest interest charges. Also if you go over your limit, the bank must contact you and ask for permission instead of charging you $39 and automatically allowing the charges to go through.
A new twist is that college students under 21 must have a parent cosign for credit cards. Unless they make an income and can prove it. A followup to this, is kids must have parental approval for an increased credit line. There even is laws regulating gift cards and the fact they don’t expire.
So do you think these laws will stop people from overcharging? Do you think these new laws will help people learn to properly use credit? Do people need so much intereference and oversight from the government?
4 responses so far ↓
1 Hippie Cat // May 25, 2009 at 5:15 pm
I’m glad someone is stepping in to regulate credit card companies—hopefully it will happen with health insurance companies changing their policies every 5 minutes too. As far as making people step up to the plate or not…. I think nothing will change a person with tendencies to overcharge unless they take it upon themselves to change. I’m all for the changes with minors and the automatic charges to your bank account.
2 LAL // May 25, 2009 at 8:02 pm
I hope it will help people but I really wonder if people are learning anything from these rules? Or will it just cause them to become less responsible?
3 chris // May 25, 2009 at 10:38 pm
I think thee will be improvement, but this won’t be the end all be all to credit card abuses by both customers and the issuers.
But maybe an increment here and an increment there will improve the integrity of the whole process.
4 LAL // May 26, 2009 at 9:07 am
Chris I fully agree! This isn’t the end by a long shot.
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