Will the terms of the Credit Card Act affect you? Of course they will. And some of the much-advertised terms aren’t quite what they seem. So be careful.
For instance, the new law requires 45 days’ advance notification of “significant changes” in the terms of your account. But apparently the lawmakers didn’t believe that decreases in your credit limit were “significant changes.”
So keep an eye on your statements – reading both the interest rate and the credit limit. And if you’re about to go shopping for a major purchase, check your account on line before using that card.
You can’t be hit with an overlimit fee unless you’ve opted in to allow overlimit transactions, but that means you could be red-faced when a retailer runs your card and says “sorry.”
Remember that getting near a “maxed out” status will have a negative effect on your credit score. So think carefully about using the card for a large purchase if it’s going to put you close to your limit.
Your interest rate on future purchases can be raised upon 45 days advance notice, and in most cases cannot be raised on existing balances. However…Your interest rate can raised on both existing balances and future purchases without notice if you’re 60 days late on a payment, if you’ve been using the card under a promotional rate, or if your card is at a variable rate tied to the Prime Rate.
Required advance notices must include an opt-out clause. Consider whether it makes sense to opt out if you dislike the proposed change. Opting out will close the account but ensures a “beneficial” repayment plan.
One huge benefit for consumers under the new plan is that your bill will be due on the same day each month, and the credit card issuer will be required to mail your statement 21 days ahead of the due date.
Now you won’t be late with a payment because the bill didn’t arrive until a day before a new due date. You’ll know when it’s due and can go on line to make the payment even if a statement is lost in the mail.
Credit card issuers are also no longer allowed to charge a fee for taking your payment over the phone or on the Internet. But… of course there’s a “but.” They can charge a fee to expedite payment through a service representative. So don’t wait until the due date to call. It could cost you anywhere from $15 to $39 to get that payment posted on time.
In fine print that I personally find dishonest, credit card issuers can require that your payment be received a day or even a couple of days ahead of the due date, in order to give them time to process the payment by the due date. So read the fine print. Your due date might not really be your due date.
Author: Mike Clover
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