Credit card holders received some good news last week. The first phase of the much lauded credit card bill went live and, already the credit industry is seeing major changes in the way that credit card companies run their business.
The new credit card legislations are just the tip of the iceberg that is the credit card bill. These regulations introduce only minor changes compared to what the credit card bill has in store. The bulk of the credit card bill won't be going live until February of next year, however and credit card holders will have to make do in the meantime.
One change which the new legislation is bringing is the extension from 14 days to 21 days of the amount of time that credit card bills have to be mailed to credit card holders before the bills become due. The 7 day extension can certainly be very helpful for credit card holders who regularly miss their bills through slow mail and other circumstances. The catch is that some credit card holders might view this as an extension of 7 days before they have to pay their bill, a risky assumption to make.
Another, more significant change is the requirement that credit card companies give credit card holders 45 days of notice before any significant changes are to be made in their credit card agreement. The previous requirement was only 30 days. The additional 15 days will certainly help credit card holders adjust to new payments. Credit card agreement changes covered in this requirement include interest rate changes, fee changes, minimum payment rate changes and a moving from a fixed rate interest to a variable rate one.
Credit card companies are now also required to give credit card holders the option to opt out of any changes in their credit card agreement. Credit card holders might want to opt for this arrangement if they feel that the agreement changes being made are too much for them. To opt out of the agreement, they only have to mail an opt-out letter within a particular time frame. Credit card holders who choose to opt out of credit card agreement changes will have to pay off any balances they have within five years using their existing credit card agreement conditions. Depending on how large their balance is, credit card holders may have to pay a larger minimum amount per month to be able to pay off the balance in five years. The credit card may also be canceled and the credit card holder must no longer put additional charges on the credit card.