{"id":2132,"date":"2016-06-02T00:00:00","date_gmt":"2016-06-02T00:00:00","guid":{"rendered":"https:\/\/qa.simplifimoney.com\/blog\/understanding-new-credit-card-rules\/"},"modified":"2022-08-08T17:10:18","modified_gmt":"2022-08-08T17:10:18","slug":"understanding-new-credit-card-rules","status":"publish","type":"post","link":"https:\/\/www.quicken.com\/blog\/understanding-new-credit-card-rules\/","title":{"rendered":"Understanding the New Credit Card Rules"},"content":{"rendered":"<p><\/p>\n<p>A new federal law that became effective on February 22, 2010 is expected to save cardholders billions of dollars in fees and interest payments. But even with these friendlier rules, you still must pay close attention to your monthly statements. Here are the most important changes.<\/p>\n<h2 class=\"\">Interest rate protections<\/h2>\n<p><b>To your credit<\/b>. The interest rate on your credit card can no longer be raised because you made a late payment on a bill other than your credit card bill. But paying bills late still hurts your credit score\u2014and a good credit score is more important than ever because card issuers have responded to the new rules by getting more selective about which customers they\u2019ll accept. It\u2019s now going to be much harder to get a credit card if you have a low credit score.<\/p>\n<p><b>Rising rate?<\/b> Your interest rate on a new card can\u2019t be raised for the first year unless it\u2019s an introductory promotional rate. In that case, the introductory rate must last at least six months.<\/p>\n<p><b>Take notice<\/b>. Card issuers must give you 45 days\u2019 notice before raising your interest rate, and give you the option of cancelling the card and paying off your balance at the old rate. But there are exceptions: You don\u2019t get the 45-day heads-up or the option to pay your existing balance at the old rate if:<\/p>\n<ul>\n<li>Your credit card payment is late by 60 days or more.<\/li>\n<li>Your old rate was clearly disclosed as promotional and has expired.<\/li>\n<li>Your card has a variable rate. In this case, your rate could rise with little warning. In anticipation of the new law, many banks shifted to variable-rate cards.<\/li>\n<\/ul>\n<p><b>Highest rate first.<\/b> If you have a card with balances on which you pay different interest rates and you pay more than the minimum every month, the extra money in your payment must reduce your highest-interest balance. For example, say you\u2019re paying 9% on your old balance but 19% on new purchases. If you make more than the minimum monthly payment, the extra money will go toward reducing your 19% balance. The result: Your debt will be paid down faster.<\/p>\n<p><b>Be good!<\/b> Now you\u2019ll be rewarded for good behavior. If you trigger a higher rate because of a 60-day delinquency, the old rate must be restored after you\u2019ve paid on time for six consecutive months.<\/p>\n<h2 class=\"\">The new facts about fees<\/h2>\n<p>Under the new rules, you can\u2019t be charged a fee for going over your credit limit unless you\u2019ve stated in advance that you\u2019re willing to do so. If you haven\u2019t agreed to pay this fee, the credit issuer will reject any transaction that puts you over your credit limit.<\/p>\n<p>Think long and hard before you agree to pay a fee for the privilege of exceeding the limit on your card. For most people, it\u2019s smarter to limit your spending to what you can afford and save the fee.<\/p>\n<p>You also can\u2019t be charged a fee for paying your bill by phone or electronic transfer. But you can be charged if you need the help of a live person to make a payment.<\/p>\n<p>The law doesn\u2019t prevent issuers from creating new fees or increasing existing ones. For instance, some issuers have started charging an \u201cinactivity\u201d fee for cards that you don\u2019t use. Others have imposed, or increased, a fee on purchases made outside the U.S. These include online purchases when the retailer is located in another country. To stay up to date on new charges, you need to read the \u201cterms and conditions\u201d section of your statement.<\/p>\n<h2 class=\"\">What your credit card company MUST tell you<\/h2>\n<p>Under the new consumer protections, your credit card statement must clearly show:<\/p>\n<ul>\n<li>The fee for late payments, and include a warning that they can result in a higher \tinterest rate.<\/li>\n<li>How long it will take and how much it will cost to pay off your debt if you make \tonly minimum payments.<\/li>\n<\/ul>\n<p>A sample disclosure statement issued by the Federal Reserve shows that it will take a consumer 10 years to pay off a $1,784.53 balance at a 21.99% interest rate if he makes only the $53 monthly minimum payment. The sample statement also shows that if the customer instead paid $62\u2014just $9 more a month\u2014he could pay off the balance in three years, and save more than $1,000 in interest.<\/p>\n<p>The new credit card rules can reduce the fees you pay, help you pay down your debt more quickly and plan your spending more wisely. As a result, you should be better able to live within your means.<\/p><\/p>\n","protected":false},"excerpt":{"rendered":"<p>A new federal law that became effective on February 22, 2010 is expected to save cardholders billions of dollars in fees and interest payments. But even with these friendlier rules, you still must pay close attention to your monthly statements. Here are the most important&#8230;<\/p>\n","protected":false},"author":17,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"_seopress_robots_primary_cat":"","_seopress_titles_title":"Understanding the New Credit Card Rules | Quicken","_seopress_titles_desc":"A new federal law that became effective on February 22, 2010 is expected to save cardholders billions of dollars in fees and interest payments. But even with these friendlier rules, you still must pay close attention to your monthly statements. Here are the most important changes.","_seopress_robots_index":"","inline_featured_image":false,"footnotes":""},"categories":[106],"tags":[],"class_list":["post-2132","post","type-post","status-publish","format-standard","hentry","category-investing-retirement"],"acf":[],"jetpack_featured_media_url":"","_links":{"self":[{"href":"https:\/\/www.quicken.com\/blog\/wp-json\/wp\/v2\/posts\/2132","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.quicken.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.quicken.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.quicken.com\/blog\/wp-json\/wp\/v2\/users\/17"}],"replies":[{"embeddable":true,"href":"https:\/\/www.quicken.com\/blog\/wp-json\/wp\/v2\/comments?post=2132"}],"version-history":[{"count":1,"href":"https:\/\/www.quicken.com\/blog\/wp-json\/wp\/v2\/posts\/2132\/revisions"}],"predecessor-version":[{"id":2755,"href":"https:\/\/www.quicken.com\/blog\/wp-json\/wp\/v2\/posts\/2132\/revisions\/2755"}],"wp:attachment":[{"href":"https:\/\/www.quicken.com\/blog\/wp-json\/wp\/v2\/media?parent=2132"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.quicken.com\/blog\/wp-json\/wp\/v2\/categories?post=2132"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.quicken.com\/blog\/wp-json\/wp\/v2\/tags?post=2132"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}