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.