Market In Review: The Wells Fargo ViewSM

Posted by Ann Stickel on March 16, 2010

Credit Card Reform impacts millions…
With an average count of nine credit cards per American household, the new credit card regulations that went into effect on Feb. 22 will have sizeable impact on our country.

The provisions – part of the Credit Card Act signed into law by President Obama on May 22, 2009 – call for credit card companies to give consumers 45 days advance notice of significant changes in the terms of their accounts and the right to ‘opt out’ of the account if they disagree with the new terms. Issuers are required to send bills to consumers at least 21 days in advance of the payment due date, and the due date must be the same every month.

Also, card issuers can no longer:

~ raise interest rates on existing balances unless the card has a variable interest rate and the underlying index increases, a temporary rate for a specified period of time, or the customer is more than 60 days late on a monthly payment;

~ raise rates on new accounts for a period of 12 months;

~ charge a fee when a consumer exceeds a credit limit, unless the customer opts in to being charged the fee;

~ charge extra for certain payment channels, such as pay by • phone, unless the payment is expedited and representative of the creditor assists;

~ engage in the practice of double cycle billing.

In addition, card issuers are now required to provide more insight to customers about how much it costs to carry a balance on the card by paying only the minimum payments each month and how much the consumer will need to pay to eliminate the balance in three years.

* Article Courtesy of Wells Fargo