President Obama last week signed a bill that would create a new set of credit card laws that are aimed to help the consumers. The new law will take go into effect on July 1, 2010. Among the most sweeping changes are:
- No More Universal Default: the practice of raising interest rates on customers based on their payment records with other nonrelated credit issuers such as utility companies and other creditors would end.
- Limited Interest Rate Hikes
- More time to pay credit card statements: Credit card companies must give cardholders at least 21 days after the statements are mailed out.
- Limit on “Over-the-Limit” fees: Purchases over the credit card limit will be blocked preventing overdraft fees
- Highest Interest Balances are paid first: Payments above the minimum balance due goes to the highest interest balance first. (eg. if you $10,000 in 0% balance transfer and $2,000 in cash advance at 10%, the payment above the minimum balance will go to toward the higher interest item)
- Clearer due date and time: No early morning deadline or weekend/holiday due dates