New Credit Card Rules: End to 'Abusive Practices'?
Feb. 22, 2010 — -- New protections arrive today for Americans suffering under the weight of rising credit card debt and frustrated by unforeseen fees and limits.
"Starting Monday, credit card customers will see an end to many abusive practices that have driven Americans into debt," Sen. Chris Dodd, chairman of the Senate Banking Committee, said in a statement. "Customers need to act responsibly. In turn, they deserve to be treated fairly."
Congress passed the sweeping new rules, which come after years of complaints, in May of 2009. Credit card companies will no longer be able to hit consumers with a fee for exceeding their limit unless the consumer has agreed. The companies cannot shift due dates for consumers, which can result in late payments.
Also, the companies can no longer target young consumers with aggressive solicitations. And the companies cannot ratchet up interest rates unless they give 45 days' notice. If they do raise rates, they must reduce the rates if a consumer pays on time for six months.
"With today's implementation of new rules, we are taking a critical step forward in our effort to protect American families by prohibiting the use of unfair retroactive rate hikes and late fee and over-limit fee traps by credit card companies," Treasury Secretary Tim Geithner said.
"Thanks to the leadership of President Obama, who signed the Credit Card Accountability, Responsibility and Disclosure Act into law last spring, families will finally have clear, fair rules of the road that will help them understand what they are getting into when they sign up for a card and how much they pay to use it."
