Ramsey County

Making $ense of Dollars and Cents

May 25, 2009

New Rules Benefit Credit Cardholders

          Congress recently passed legislation that will reform many of the common practices of credit card companies.  The new “Credit Cardholders’ Bill of Rights Act” does not go into effect until nine months from now but when it does consumers will find that it:

          - Prohibits retroactive rate increases unless the cardholder is at least 60 days behind in paying his/her bill.

          - Has provisions for restoring a past, lower interest rate.  If a cardholder does fall behind in making payments and the rate on past purchases is increased, the lender must restore the lower rate after six months if the cardholder pays his/her monthly bills on time

          - Requires lenders to post their credit card agreements on the internet (no more fine print!)

          - Requires that cardholders be notified 45 days in advance before rates are increased

          - Requires anyone younger than 21 to prove they can repay the money before being approved for a card, or have a parent promise to pay off their dev if they default.

          - Prohibits the lender from charging higher “over-the-limit” fees unless the cardholder has agreed to be allowed to go over the limit on their card

          - Requires that gift cards remain valid for five years (A major gain for consumers!)

          - Bans “pay-to-pay” fees which were charged when someone paid their bill by phone or on the Internet

          Next week, we’ll look at what is not included in this legislation and how the new rules may affect cardholders who always pay on time.

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524 4th Ave NE #5, 2nd Floor Ramsey County Courthouse
Devils Lake  ND  58301
701-662-7027
email - NDSU.Ramsey.Extension@ndsu.edu