It’s nice that the Senate has passed new credit card rules aimed at protecting consumers. Indeed, new rules on interest rates, over the limit practices notification of new card terms are all to be applauded. Going forward, these rules will better level the playing field and give us better information so that we can improve the way we use our credit cards. However, from the time these credit card reforms are passed (they haven’t been passed by the House, but are expected to be) until the new rules go into effect in 9 months, things are probably going to get ugly for us.
Will credit card issuers rush to take what they can get?
The recession has seen a number of changes to credit card accounts. Credit lines have been cut, fees and interest rates have been rising, and rewards have been slashed (and even discontinued). So it is nice that credit card companies will now have to notify you 45 days in advance if they plan to increase rates or change rewards programs. It gives you time to do what you need to do in order to cash in rewards. Additionally, the fact that credit card companies won’t be able to retroactively hike rates — unless you are 60 days delinquent — is a nice touch. But none of this takes effect for 9 months. Until then, we are naked before the storm.
Because credit card companies have never been overly nice about balances and interest rates, it is quite likely that you could see your interest rates rise. Your rewards values may be cut. I would be very surprised if credit card issuers don’t try to get whatever they can out of you before the new rules take effect. So be on the look out. And be aware that they don’t have to give you any notice. Consumer protections aren’t in place yet.
Do you think that credit card companies will go on a rampage over the next 9 months?
image source: larrybobsf via Flickr