The first new credit card rules are set to take effect on Aug. 20 as part of more consumer-friendly legislation signed into law in May.
Here are the changes you should know about:
1. Significant Changes Will Require Notice
Starting Aug. 20, credit card issuers will have to give borrowers at least 45 days notice before making significant changes involving credit card rates or fees, according to Credit.com. Currently, cardholders are only required to get 15 days notice for these changes.
Unfortunately, lowering your credit limit and even closing your account may not be among the changes deemed “significant,” says Adam Levin, credit expert and Chairman of Credit.com. What falls under “significant” has yet to be clarified, he says.
2. Any Rate Change Can Be Rejected
Consumers will have the right to reject a proposed rate increase, provided that they cancel the card before the change goes into effect.
3. Bill Payers Now Have More Time
Credit card issuers will also be required to mail out billing statements 21 days before due dates, giving cardholders an extra week to make payments.
But these added benefits to consumers, as well as many other regulations to take effect in February, have left credit card companies scrambling for ways to make up any possible losses in revenue caused by the new rules.
In the time between President Obama’s signing of new credit card legislation and when new rules take effect, credit card companies have been raising interest rates, cutting credit limits and closing accounts altogether, even for those with excellent credit, Levin says.
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