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Tracy Becker
President
North Shore Advisory, Inc.
155 White Plains Rd. Suite 203
Tarrytown, NY 10591
Co-Author
"The Credit Solutions Kit"
Phone 914-524-8300
Fax 914-524-5014
Visit Website
-Tracy's educational seminars
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-Blog with articles about current credit news
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Credit Card Act
signed by the President
The
Credit Card Accountability Act has been signed by the President this past
Friday. In 9 months, February 2010, the new credit card rules will
take effect. These rules stop companies from giving cards to people under
21 unless they can prove they have the ability to pay the debt or a parent
or guardian co-signs. A credit card user will also have to be more than 60
days behind on a payment before seeing interest rate increases on existing
balances. Even then, the lender will be required to go back to the lower
rate if the cardholder pays the minimum balance on time for six months.
Consumers
will have to receive 45 days' notice and an explanation before their
interest rates increase. The legislation bans a practice known as
double-cycle billing. This practice is when a consumer pays late and is
assessed interest to the late balance and a prior month's balance that had
been paid in full. The legislation also forces the Card Issuer to clarify
the cost of using credit card debt to the consumer. Some provisions are
geared toward forcing consumers to recognize how much they're paying in
interest. Card issuers will provide information to the consumer on
counseling and debt-management services.
These
changes mark the beginning of a backlash against the credit card companies
after years of fee and rate hikes and unending profits. The new reform
sorts a set of rules issued by the Federal Reserve last year and puts them
into effect five months sooner than the Fed had planned. The negative side
of these changes could be a return of the annual fee and fewer 0%
promotional rates and offers. Consumers may see lower limits and less
reward programs. Companies will be looking to offset the loss in profits
resulting from the new laws.
Copyright ©2009 North Shore Advisory Inc.
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