This summer, the U.S. Congress passed — and President Obama signed — sweeping credit card reform legislation to curb credit card company abuses and protect consumers.
According to Consumers Union, the average credit card debt for low and middle income families is $8,650. These families have been prime targets for the predatory credit card industry, which raked in a staggering $18 billion in profit in 2006. The top credit card companies routinely raise interest rates on existing balance on an “any time, any reason” basis, charge exorbitant fees for any and every infraction, however minor, apply payments to low-rate balances before high-rate balances to maximize interest charges and more. These reforms are long overdue.
What does this reform legislation mean to you?
- No more late fees because your bill was sent too late for you to pay in time.
- Forty-five days advance written notice of changes in significant terms on the account.
- The right to reject the new terms (your card company then has the right to cancel your account and require pay-off under your old terms).
The rest of the reforms go into effect in February, including an end to retroactive rate increases in most cases. Read more from Consumers Union.