Credit card rules still being pursued with by government
Sweeping reforms were introduced by the Federal Government last year to protect the credit card customers from being ripped off by the credit card issuers in various ways. New rules were created to restrict the issuers from paying cheap tricks to get the customers’ money thus providing additional protection to unsuspecting credit card customers. The greatest number of changes which started in August last year was seen this year in February, which also included young customers’ ability to get credit card accounts. This means that those who are below 21 years of age need to show proof of income to support a loan or a co-signor.
There have been more changes including those which include requirements for credit card companies to change the billing statements. This pattern will allow credit card customers to actually find out what would be the time it will take to pay off the debt if they continued with the minimum monthly payment. It will also give them information about the total interest they are paying to get rid of the debt. This way, customers will actually be motivated to pay off the debt as soon as possible. The new rules also include some stipulation on the interests. The introductory rates must long at least 6 months. Interestingly, the card issuers cannot increase their costs at their own whim and fancy. They definitely cannot do so in the first year of opening the account. The rise in interest rates will also apply only to new purchases for a balance transfer deal. There have been various other caps that have been placed on the fees that can be charged by the credit card issuers. The fees cannot exceed 25% of the credit limit that the customers are charged.
Last month, saw more reforms to the rules limiting the credit card issuers. Account promotions that eliminate the interest money charged for duration of time, must now follow similar rules as offers for reduced interest rates. Also the application fees, has been confirmed as being part of the upfront fees and hence should be calculated for estimating 25% allowed for fees. The issuers too have to now use the individual rather than the household income to ensure, that housewives or students or anyone without a personal income doesn’t get a card without the approval of the earning members of the family. All these new rules have further closed some of the loopholes of credit card reforms that issuers were trying to exploit.
