Credit Card Laws That Will Help In Debt Management
New credit card law was signed by President Obama in the year 2009, to help consumers get rid of credit card debt. The new Federal Reserve law is more transparent than before and the detailed guidelines help you in understanding the credit card terms to avoid debt. Here are the main highlights of the credit card law.
1. The interest rate of the existing debt in the card can only increase, in case you miss your payment due date or have crossed the introductory low interest rate tenure. Any interest hike on new transaction can be done after the first year of credit card issue by the credit card companies. Other changes in the clause have to be noticed, 45 days in advance to you.
2. Any change made by the card company can be rejected by you, opt out right enables you to close the account by clearing all the credit card debt. In case you want to clear off the debt and close your account, then this can be done under the old terms. If the value of your debt is high then you have five years to clear off the debt, by using the opt-out right.
3. Credit card companies are banned to issue card to anyone who is under 21 years of age. In case if you are below 21 years, then you need to have an adult as co-signer. If you have enough income to repay credit card debt and have an income proof then in such a situation the company can provide you a credit card.
4. The new Federal law also provides a reasonable amount of time to its creditors to clear off card debt every month. The bill delivered to you has a due date, which means that the payment of your debt is due at least 21 days after the bill is mailed to you or delivered to you. Late fees can be charged only after the due date.
5. In case if you have more than one account carrying different interest rate, for different purchase made, then the payment made by you goes to the one with the highest interest rate. Before the law was enforced the company would transfer the minimum amount to the lowest interest debt, so that the payment of credit card debt takes long.
6. The finance charges are now calculated by the company on the purchase made in the current cycle, rather than going back to the previous year. The calculation of interest , by comparing the last years bill is known as double cycle billing , which was hurting , as you need to pay higher interest, even thou, all your credit card debt has been cleared.
Moreover the federal law for the credit card has also given an option to its credit card holders, wherein you can make payment for the minimum amount that is due and also collect information, as to how the debt can be cleared off using monthly payment mode.
New credit card law was signed by President Obama in the year 2009, to help consumers get rid of credit card debt. Before the law was enforced the company would transfer the minimum amount to the lowest interest debt, so that the payment of credit card debt takes long.
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