Credit card bill necessitates student wariness
>>Print ViewPublication Date: 11/17/2009
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In May, Congress passed the Credit Cardholders’ Bill of Rights. This bill does not go into effect until Feb. 22, so credit card companies are trying to get away with as much as possible before then. Beware, credit-card holding students!
The bill places quite a few restrictions on credit card companies. These include preventing most rate increases on existing balances, mandating 45-day notices on rate increases, making sure agreements are written in “plain English,” rewarding good payment behavior, curbing fees for paying online or by phone, and several other rules.
These restrictions make life much easier for credit cardholders, so naturally the credit card companies are rebelling. Since the bill does not go into effect for a couple of months, credit
card companies are trying to make up for lost revenue by essentially raising rates without so much as warning customers. They are making the most out of the remaining few months until their bad behavior becomes monitored.
Credit card companies have also been calling customers and surprising them by lowering their credit limit regardless of whether they make timely payments. Now that they have restrictions, they are having qualms about letting customers have high credit limits.
have high credit limits.Congress has caught wind of the credit card companies’ schemes, and are now taking steps to make sure this outrageous behavior is stopped. Congress has expedited this legislation in order to shorten the credit card companies’ grace period. The bill may have trouble getting passed by the Senate, but if they allow it to go through, it will go into effect as soon as President Obama signs it.
Students, check your interest rates. Be aware. If your credit card company is trying to jack your rates way up, it may be wise to close accounts and try another company after the bill passes. Also, if you like your credit limit, be wary of letting the company force you into a much lower one.