New Credit Card Regulations for 2010

Come February 22, 2010, the new credit card rules for reform this 2010 will give credit card holders much to be happy about.

Here is the new set of credit card rules from the Federal Reserve.

No floors

Credit card companies will not be allowed to set minimum interest rates. They won’t be able to raise rates until 60 days have passed on a late payment. These rate “floors” had been used to make up for the risk involved with credit cards, particularly with more people being unable to pay on time, or at all. Monthly statements will have to indicate clearly how long it will take consumers to pay off their debt if they only pay the minimum every month.

Fair warning

However, the case will not be the same for variable interest rate cards, which base their rates on the prime rate. The prime rate follows the general trend of the economy. However, given that banks may try to pick the day with the highest interest rates for the month as the reference for their rates, the new rules say that they have to warn their consumers 45 days in advance when they will change their rates.

You’re in when you say you are

The credit card applicant or holder will not be automatically enrolled in programs that will allow them to charge beyond their credit limits. This practice introduces actions similar to overdrafts, with fees included that are sometimes not told to consumers.