Look Out for the New Credit Card Regulations

On February 22, there are some new laws and regulations going into effect for credit card account holders. While these new restrictions and guidelines are being touted as a way to protect consumers, there are many things you need to be aware of if you have a credit card. Here are some of the new regulations that may affect you in a bad way.

Balance Statements
The new regulations will require credit card companies to mail bills to their cardholders at least 21 days before the payment is due. The current guidelines call for the bills to be mailed just 14 days before the payment is due.

Co-Signers
Any person under the age of 21 will need to have a co-signer before they can apply for a credit card account. The co-signer will be responsible for any payments and balances that the cardholder misses.

Payment Explanations
One of the most interesting new guidelines that the credit card companies will need to follow after enacting these new measures is that they will have to show you how you are affecting your balance by only paying the minimum payment each month. There will be a descriptive graphic in your statement that shows how much you will be paying in the long run when making the minimum payment versus how much money you can save over time by paying more than the minimum payment. Making minimum payments on your credit cards can increase your overall costs by thousands and extend the life of your payments by several years.

Interest Rates
There is good news and bad news about the new guidelines regarding interest rates. On the one hand, there is no cap on the interest rates according to the new laws. However, there are stricter guidelines that the card companies must follow before raising your rates. After February 22, your credit card companies cannot raise your interest rates unless you have an existing balance and you are at least 60 days late on your payments. In addition, the card companies must give you a 45 day warning if they are going to raise your interest rates on future purchases. Unfortunately, they do not have to provide a reason for raising those rates.

These are just a few of the significant things to look out for with the new regulations. As always, it is critical that you read the fine print of any credit contract before signing up for one. You should also read your statements and any paperwork that comes along with them so you can be informed and updated about any changes being made. When it comes to your credit cards, you don’t want to be caught off guard because, as Dave Ramsey likes to say, if you are going to play with snakes, eventually you are going to get bit.