Changes On The Way For Credit Card Industry With Credit Card Bill

The credit card bill is on the way. In fact, some of the legislation included in the bill will be going live this month, though the bulk of the bill will only go active in February of next year.

The credit card bill was created to make the credit card industry fairer for credit card holders. In the past few years, credit card companies wielded almost unlimited power in the credit industry and credit card holders had very little. Credit card holders could change interest rates at their will and, through a combination of lopsided legislations and manipulative and deceptive practices, credit card holders were completely at their mercy.

Now, the credit card industry is going to see some changes, whether the credit card companies want them or not. Here are a few major points that credit card holders should know about the changes that the credit card bill will bring.

The credit card bill will limit arbitrary interest rate changes. Credit card companies will be required to give out a notice 45 days before applying an interest rate to a client. Currently, they are only required to forward notices 15 days before raising interest rates. What’s more, once a credit card holder is able to consistently pay his or her monthly bill in a span of six months, credit card companies are required to return the credit card holder to the original cheaper interest rate.

Credit card companies are also prohibited from raising the interest rates of a newly approved credit card for one year unless the credit card holder misses making a minimum monthly payment. A card holder’s existing balance will also be exempt from interest rate increases, although the credit card company is raising the interest rates of the holder for new purchases. However, these two legislations are only available for credit cards with fixed interest rates. Variable interest rate credit cards are exempted which is largely the reason why credit card companies are now moving their clients to variable rate interest rates.

The credit card bill will also make payments much more fairer for credit card holders. It will stop credit card companies from charging the customer any fees whenever he or she makes payments. One example are fees credit card holders have to pay when they opt for “pay by phone” services.

The credit card bill is going to introduce a lot of changes into the credit card industry. Most of these changes are aimed to be beneficial to credit card holders. Unfortunately, credit card companies have been less than receptive to the ideas behind the credit card bill and they are currently very busy raising profits at the cost of ruining credit card holder finances, tightening up available credit for clients and finding loopholes to defeat the purpose of the credit card bill.