It's been three months since a law was passed protecting you from credit card practices that end up costing you big. Part of that law doesn't go into effect until February of 2010. But last week, some big changes were put into place. And in this week's Scam Alert, ABC2 News Joce Sterman breaks down those changes so you don't get ripped off.
It's become the motto of our generation: Charge It! We whip out the plastic without a thought for so many purchases and end up feeling the pain once the bill arrives. It's a dangerous cycle, made worse by the freedom given to the credit card companies to hike our rates, add fees and even more. Angie Barnett with the Better Business Bureau tells us, "They could change or modify the terms of our credit card payments pretty much willy nilly."
But that's not the case anymore, thanks to the Credit Card Accountability Responsibility and Disclosure Act of 2009, which was passed back in May. It's designed to make credit card company practices more transparent and fair. And Barnett says, "Now their ability to do direct damage to a consumer is really limited."
That damage will be limited by portions of the Act that just went into effect. As a result, your credit card company must now mail your bill at least 21 days before it's due. And they've got to give 45 days notice before making any significant changes to things like your interest rate or certain fees. Barnett says, "We're getting advanced notice so we can shop our options when we know our rate is going up so that helps the consumer."
But Barnett says consumers need to know that if you reject the increase, your card can be cancelled and you'll have to pay off what you owe at the current rate, potentially with a higher minimum payment. You may also lose any reward points you've earned on your card, so you need to keep that in mind as you consider the new rules that make spending with plastic a little more flexible.
Consumer Union's Information on Credit Card Reform
Better Business Bureau
