The Impact Of The New Credit Card Rules

If you haven’t hard, the credit card bill is finally flexing its muscles with the activation of a few of its legislations. Too bad the changes are not as dramatic as you and every card holder in the country would want it to be but, at the very least, it should introduce some very welcome minor changes to how credit card companies run their business these days.

The new legislations coming out mainly involve changes in the way that you get notices for credit card agreement changes and for when your billing arrives. Under the legislation, credit card companies need to give you notice 45 days before they implement any changes on your credit card agreement. Such changes would include interest rate hikes and other major changes that would affect your credit card usage. Credit card companies will also have to send out billing notices 21 days before the bill is due. Currently, credit card companies only have to notify credit card holders 15 days before any changes in their credit card agreement and they are required to send billing statements only 14 days before the bill due date.

With these changes in place, credit card holders will have easy access to timely information regarding their credit card agreement and their bills. Of course, a large part of the effectiveness of these changes rest on the credit card holders themselves. Credit card companies can send out notices as early as possible but, unless credit card holders take the time to read them, these notices are essentially of little value. In the hands of a smart credit card holder, these changes can be very helpful, however.

With a larger time allowance between the notice of credit card agreement change and the time when the change takes effect, credit card holders will have more time to reconsider their situation and, if possible, shop around for better deals. Credit card companies are also required to inform credit card holders that they have the option of refusing the credit card changes and arranging for a payment arrangement that would allow the credit card holder to pay off their balance based on the original agreement. Thus a credit card holder can opt out of the credit card agreement changes. However, in most cases, this will mean that the credit card holder will be giving up their credit line for that privilege.

Unfortunately for most credit card holders, credit companies have already foreseen the effect of these credit card bill legislations and have acted accordingly. For instance, credit card companies have to send out a 45 day notice for interest rate changes only if the credit card is using a fixed rate. Thus, credit card companies are moving their credit cards to a variable rate instead.