New Credit Card Law

The recently passed Credit CARD Act (Credit Card Accountability, Responsibility and Disclosure Act) will benefit most personal credit card holders. The law goes into effect in this week but does not impact business credit cards.

You will have more time to pay your monthly bill; credit card companies will be required to mail monthly statements at least 21 days before the payment is due (some companies are currently mailing statements less than 21 days before the due date).

Payments will be due on the same day each month (not the 15th this month, the 12th next month, etc).

You will have the opportunity to "opt-in" allowing over-the-limit fees to be charged to your account. If you don't "opt-in" any charges you make that put you over your credit limit may be declined, but you CANNOT be charged a fee for exceeding your limit.

If you carry balances with different interest rates (purchases, cash advances & balance transfers), payments over the minimum amount will be applied toward the balances with the highest rates first (currently, payments are applied to the balance with the lowest rate first).

Companies will not be allowed to increase your interest rate during the first year. Penalty rates cannot be assessed unless you fail to make a required payment within 60 days of the due date. In the case of a penalty rate, you must be given 45 days notice that your rate is increasing; you'll still have the option to not accept the new terms and close your account at your existing rate.

Possibly the most beneficial new regulation will show consumers how long it will take to pay off the balance if you're only making minimum monthly payments, and will include options for paying balances off in 36 months.

Free Money?

Just like reviewing your credit report on a frequent basis, you should also check your state's website for any money owed to you, such as dividends, paychecks and dormant bank accounts. Companies that owe you money and are unable to locate you are required to turn that money over to the state escheat office.

The National Association of Unclaimed Property Administrators' website (unclaimed.org )offers the ability to search by state or name. The MissingMoney link allows you to search by your name.

You can also enter "unclaimed property" in your web browser's search box for additional websites. If you find your name on a list, follow the instructions on the website to file a claim.

Is This Taxable Income?

While most income you receive is generally considered taxable, there are some situations when certain types of income are partially taxed or not taxed at all.

Common items that are not included in your income:

• Adoption Expense Reimbursements for qualifying expenses
• Child support payments
• Gifts, bequests and inheritances
• Workers' compensation benefits
• Meals and Lodging for the convenience of your employer
• Compensatory Damages awarded for physical injury or physical sickness
• Welfare Benefits
• Cash Rebates from a dealer or manufacturer

Some income may be taxable under certain circumstances, but not taxable in other situations. Examples of items that may or may not be included in your income are:

• Life Insurance -- If you surrender a life insurance policy for cash, you must include any proceeds that are more than the cost of the life insurance policy. Life insurance proceeds which were paid to you because of the insured person’s death, are not taxable unless the policy was turned over to you for a price.
• Scholarship or Fellowship Grant -- If you are a candidate for a degree, you can exclude amounts you receive as a qualified scholarship or fellowship. Amounts used for room and board do not qualify.
• Non-cash Income -- Taxable income may be in a form other than cash. One example of this is bartering, which is an exchange of property or services. The fair market value of goods and services exchanged is fully taxable and must be included as income on both parties' tax returns.

All other items—including income such as wages, salaries and tips—must be included in your income unless it is specifically excluded by law.

These examples are not all-inclusive. For more information, see Publication 525, Taxable and Nontaxable Income, which can be obtained at IRS.gov or by calling the IRS at 800-TAX-FORM (800-829-3676).