New Law Coming Regarding Credit Card Rate Hikes Informative - New Guidelines - No Arbitrary Increases On Existing Balances

Review by Slimjim on 2008-12-18
From what I'm hearing, it appears the credit card lenders will finally have to cease the practice of hiking credit card interest rates on account balance holders. Future purchases or new cards can have term modifications, but no longer will card companies be able to recoup losses from bad debtors by slamming their good payers.

We've been seeing complaints here daily about major lenders doing this to consumers. I've never thought it was fair or ethical to change someone's rate to a sky high plateau after they used the card at an agreed lower rate.

Some other changes also would be eliminating double billing cycles and having larger grace periods before being considered late.

This is a law that is a long time coming.
Comments:20 Replies - Latest reply on 2009-01-30
Posted by Anonymous on 2008-12-18:
This is being voted on today, has not gone into affect. Furthermore, if it does eventually go into effect, it will not be until 2010.
Posted by Anonymous on 2008-12-18:
People get a lot a grief on my3cents for complaining about the unfair practices of banks and credit card issuers but it is people complaining in all forums (TV, print, internet..etc) that motivates the government to make changes.

Cheers to those who made their voices heard! (VH)

Posted by Principissa on 2008-12-18:
VH slim! Great post! Nice to see someone sticking up for the little guy for a change.
Posted by jktshff1 on 2008-12-18:
saw that this morning. It would also prevent your rate from going up with one account, just because you were late with another company.
Posted by tnchuck100 on 2008-12-18:
Good post, Slim. It will be interesting to watch how the credit card companies make an all-out effort to gouge as many customers as possible before this new legislation goes into effect. You can bet they will pump out all they can before the well goes dry.

I still wouldn't hold my breath on this. They have many well paid lobbyists (funded by the exorbitant interest rates and fees) to keep this from becoming a reality.

Wouldn't it be something to watch them cry because all the good customers bailed out never to return.
Posted by saj80 on 2008-12-18:
My biggest concern is what the credit companies will do between now and 2010, when the new regulations will take effect, if approved.
Posted by Anonymous on 2008-12-18:
I'm with chuck and saj on their comments.

2009 could be a real bloodbath for current customers.

Thanks for the post slim. I can vote on this! I can vote! I can vote! Merry Christmas to me!
Posted by Anonymous on 2008-12-18:
The new regs were just passed. They take effect July 2010.

* No more raising rates on existing balances
* No more double-cycle billing.
* Any payment above the minimum must automatically apply to the part of the balance with the highest interest.
* Minimum time before notice of change of terms takes effect goes from 15 to 45 days.
* Borrowers need reasonable time before a payment is due, at least 21 days
* No excessive fees for exceeding credit limit because of a hold placed on the account
* Subprime credit cards that have a $500 credit limit but a big upfront fee will have that fee capped at no more than 50% of the credit limit, and it can be paid off over a year, rather than immediately.
Posted by MRM on 2008-12-18:
Whoohoo! I look forward to the new regulations!
Posted by Anonymous on 2008-12-18:
Hey PassingBy, thanks for Passing by.

I'm sure there was no mention of not being allowed to nail every customer possible for the next year and a half.
Posted by tnchuck100 on 2008-12-18:
Now if only they would put an end to the creative accounting practices the banks are using against us with the checking accounts.
Posted by Slimjim on 2008-12-18:
Agreed chuck, but first thing is these credit card mandates. Very common sense laws that should have been regulated in long ago.
Posted by Anonymous on 2008-12-18:
Thank you Slim!! Very helpful information.

PassingBy, thank you for the additional info. Also very helpful.
Posted by Nohandle on 2008-12-18:
Thanks Slim, I'd not heard this one yet. Passingby mentioned something: No excessive fees for exceeding credit limit because of a hold placed on the account. My question is who determines excessive fees and the amount? I'd be really interested to know that one, especially the amount.
Posted by S. on 2008-12-18:
I agree some of these new regulations should have been in force from day one. However, how ya' betting those who abuse credit cards right now will still be doing it when the new regs take effect in 2010? I especially disagreed with over minimum payments being applied to the portion with the lower interest rate rather than the higher.
Posted by S. on 2008-12-18:
Posted by lorrwill on 2008-12-29:
I am thinking that if enough good credit customers bailed on credit card hell altogether that would be a serious wake up call to the banks.

I am paying mine off and never looking back. Especially since I am a never late/over limit customer who got hit with the usurious rate hike b.s.

As to this law, a welcome change but I am not holding my breath.
Posted by bigbrother on 2008-12-29:
what ever happen to removing the universal default
rate where they can up your interest rate if you were
late on any other creditors you have (i.e water bill)
Posted by pbee on 2009-01-04:
Personaly, I don't trust the credit card companys, banks, lobbisyst,ect. Bye Bye,
Posted by nobofa on 2009-01-30:
I wonder how they plan to recoup all the customers they lost when they started gouging them? lol. I know I won't be a returning customer!

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