What you Need to Know About the New Credit Card Legislation

After taking a quick look, the new credit card legislation that has recently been passed by the Senate appears to be an extremely large victory for consumers.

However, for those people out there who pay off their bills each month and milk any rewards programs, there may be cause for concern. For some time now, many of credit card companies have been considering cutting rewards programs in order to make up for lost revenue caused by the new restrictions.

In my opinion, however, this talk is only that. Big spenders help credit card companies make money even if they don’t go into debt.
Now let’s take a look at some of the things that will be affected by the new legislation.

First, there are new restrictions for credit card companies on when they can increase the interest rate on outstanding balances. The new bill states that banks must wait until you are at least 60 days late in making the minimum payment before they are able to hit you with penalty interest rates on your existing debt. This alone is bound to help many people currently struggling with financial issues.

Secondly, credit card companies must now give a minimum of 45 days notice to customers before raising their base interest rate. They are also now required to give sufficient notice about change to the terms of a card. This should help customers who have been saving loyalty points for many years.

Thirdly, banks will now be required to send you your bill no later than 21 days before it is due. This is so that they cannot send it so late that you incur a late fee because you didn’t have sufficient time to get a check to the bank. Also, there will be no more early morning deadline nonsense which has led to many people being charged late fees because there payment arrived in the afternoon. Plus there will be no late fees if the due date is a Sunday or public holiday and your payment aren’t received until the following day.

Finally, if you are paying different interest rates for different parts of a cards balance, for example 18% on a cash advance and 14% on a purchase, whenever you make a payment more than that of the required minimum payment, the banks are now required to apply it to the highest interest portion first. I personally believe that this is the best part of the new legislation. I am a card holder myself and have found it to be quite annoying to get stuck with that high interest portion of debt.

These are the main changes that have come as a result of the new legislation. Although there are a number of other changes, these, in my opinion, are that which will most likely help the average person the most.

Tina is a credit repair forum expert with over 10 years of experience helping people with personal finances. For additional information and a free credit repair forum visit http://www.creditforumonline.com .