Congress sent credit card legislation today to President Obama, who is expected to sign it this week. The bill aims to set rules for credit card issuers that would benefit the average credit card holder.
Here is a summary of what proposed changes the House and Senate have come up with:
Better Rules Disclosure: Credit card agreements will be posted online so you can refer to them at your leisure, instead of wishing you didn’t throw them away with the junk mail.
Improved Balance Due Clarity: Companies would have to disclose to you how long it would take to pay off your balance if you made only the minimum monthly payments. They’d also have to disclose how much in interest you’d end up paying if you only made minimum payments.
More Time for Monthly Payments: Credit card issuers would be required to give you a “reasonable” amount of time to pay your bill, say 21 days, before bill payment is considered late.
Limited Fees: Over-the-limit fees would not be allowed unless you express to your lender that you want to be able to go over your limit. In other words, you cannot unknowingly go over your limit and incur a charge. The legislation also prevents companies from issuing a charge for paying a bill by phone.
More Notice on APR Increases: Currently, credit card companies don’t give much notice when they plan to increase the annual percentage rate, which is the interest you pay on your credit card balance. Now credit card companies will be required to give at least 45 days notice before interest rates are increased. Even more, they won't be able to raise your rate unless you miss payments or otherwise fail to comply with your agreement.