The Credit Card Act of 2009 was signed into law last year and is designed to limit the power that card companies have over their debtors. This is part of a new legislation by the United States government intended to help consumers reduce their debt and give them more control over how they manage their credit.
The new rules and regulations have been rolling out since August 2009, with the majority of them set to take effect on February 22nd, 2010. One of the main issues addressed by this Act is the monthly billing statements that consumers receive from their card companies. New regulations now require the following to be included on all statements:
Late Payment Deadlines and Penalties
For any credit card account that charges a late fee for late payments, the billing statement is required to show the payment due date, along with the amount of any late fees and the date that the fee would be charged. In addition, if making a late payment will also res ult in an interest rate increase, that fact must be listed on the billing statement, along with the amount of the new interest rate. The information regarding both the late payment fees and increased interest rates must appear in an area on the statement that the cardholder can easily find and read.
Detailed Pay Off Information
On at least a quarterly basis, your billing statement will now be including detailed pay off information such as:
- the number of months it would take to pay off your balance if you continue making minimum-only payments.
- the total cost of making minimum-only payments, including principle and interest.
- the monthly payment required to repay your balance within 36 months along with the total interest and principle paid on a 36-month repayment plan.
- a toll-free number that you can call for information about credit counseling and debt management.
Effects of Making Minimum Only Payments
In addition to the above requirement of showing the number of months to pay off your balance with minimum only payments, credit card issuers must also begin disclosing the cost of making minimum-only payments. Billing statements will be required to include a statement such as: "Minimum Payment Warning: Making only the minimum payment will increase the amount of interest you pay and the time it takes to repay your balance." While the Credit CARD Act of 2009 represents the most across-the-board change for consumer protection since the Truth in Lending Act was enacted in 1968, consumers must still do their part to better manage their credit cards.
To learn more on managing your credit cards as well as expert help and advice on how to reduce your debt and repair your credit, visit our site at http://debtandcreditguideblog.com. Doug Zimmer is an entrepreneur, author, and contributor to several debt consolidation and credit repair sites.
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