Laws change on a daily basis and keeping track of new rules on credit cards can be especially difficult because they don’t always make the news. The best way to ensure that you are up to date on these laws is to regularly check the Consumer Financial Protection Bureau for updated information.
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As credit cards become universal, more laws are created all the time to protect both the consumer and the credit card companies. With the fast pace of life today, it’s easy to overlook something important. Nevertheless, with a little effort, you can keep track of the new federal laws on credit cards, which may affect you or your business.
How have laws changed regarding credit cards?
As recently as the 1960s, primarily those who traveled or dined out often used credit cards. It wasn’t too long ago that a woman could not get a credit card without having her father, husband, or other male family member to vouch for her.
What are the current federal laws on credit cards?
Currently, thanks to the Credit CARD Act of 2009, which went into effect in 2010, credit cardholders are now protected from surprise increases and unexpected changes in fees and terms. However, credit card companies also claim a victory with the new laws because a few things will stay the same. There are wins and losses for both sides in this deal, which was actually passed in 2009. Some of the features included in the new federal law took time to implement but all are now in effect.
According to the Federal Reserve System, consumers have walked away with many gains from the new credit card laws. For instance, it is now easier to discontinue your relationship with a credit card company if you don’t like some of the new changes they may implement. If you do this, you are agreeing to settle the debt and close the account, without incurring extra fees and interest.
This means that you have greater power to shop around for a sweeter offer. It could also result in better service and terms from credit card companies as they realize that customers can and will jump ship more often.
The new credit card laws also help cardholders avoid those troublesome credit card late fees by making the language easier to understand. Credit card companies are presently banned from charging you extra fees if they set payment due schedules at dates and times for which you cannot possibly pay, such as outside of normal business hours.
Are there any laws to protect student credit card holders?
Yes. Credit card companies are now prohibited from marketing heavily to students or on university campuses. It was found years ago that college students were applying and being approved for student credit cards with high limits, incurring huge debt with no ability to pay and destroying their credit rating before even landing their first job.
Constant promotions and advertising at colleges without an explanation about their credit responsibilities was determined to be a primary cause of this problem but the new credit card laws have changed that. Now credit card company recruiters are not allowed to be at or near a school if they are using tactics designed to specifically lure students, such as a party-like atmosphere or new t-shirts.
Young adults still not 21 years old can receive a credit card but they are now under the same scrutiny as everyone else when applying. It is also still possible for parents to give their children a credit card, with the assumption that they will clarify the conditions for using the card and teach about the importance of managing debt.
Nevertheless, credit card companies won the right to charge more interest if you miss payments simply by giving you more than 45 days advance notice of the change. Credit card companies can also continue the system of determining your individual interest rate by looking at how you pay other bills. In other words, if you sometimes make late car payments, your credit card company can increase your interest rate even though the two bills are not connected.
What is the best way to keep abreast of new federal laws?
You can visit Consumer Financial Protection Bureau, which has extensive information updated frequently. If you would like to read the entire credit card law, you can visit the website for the Federal Deposit Insurance Corporation.
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