Obama's Credit Card Reforms Bill

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The Obama Credit Card Bill

Ever thought credit card companies have been ripping you off? Well it seems the President of the United States agrees with you.

What does Obama's credit card reform bill mean for you ?

We all know that credit cards are bad for your wealth and that credit card companies are the spawn of Satan - but hopefully Obama's attempt at reforming the industry will someusers money.

When the bill passed and comes into force credit card bills will be able to be paid online or on the phone without a processing fee being added.
Before an interest rate can be raised customers must be more than 60 days late on payments. If the interest rate is increased, it will revert to the lower rate if you make the minimum payment on time for 6 consecutive months.
Fees cannot be charged for going over the limit unless cardholders are told that their purchase will take them over their limit and they choose to authorize it to go through nevertheless.
For credit cards with more than one interest rate for different balances, any payment made must be applied to the balance with the highest interest rate first.

So what next? The bill goes to the House for a vote.

The key provisions are:-

The bills ban retroactive rate increases on existing balances. So if you have a $1,000 balance at 7%. If they change the rate on your credit card, the new rate will only apply to new purchases - they won't be able to start charging 29% on the money you have already spent.

However, if you don't comply with a debt repayment plan or if you are over 30 days (House bill) or 60 days (Senate bill) late on payments, then all bets are off.

Both bills prevent credit card issuers from increasing your interest rate over the first year of the account.

Both bills require that credit card issuers must give 45 days notice before making any significant increases in interest rates, fees and finance charge.

Any promotional rates must apply for at least six months.

Credit card statements must be sent out 21 days before the bill is due at least, an increase from the current 14 days. They can no longer choose strange times for deadlines for payments — any payments received by 5 p.m. on the due date are on time.
Payments with due dates on holidays or weekends must be accepted by the next business day.

Banks cannot issue cards to "un-emancipated minors under the age of 18" unless there is a parent that is the account holder.

College students are limited to one credit card, with credit limits set to a percentage of the student’s income. Parents must approve any increase to credit limits on joint accounts.

Card issuers are no longer allowed to increase your rates if it learns you were late on another card.

The House bill requires that issuers give 30 days notice before closing an account after these credit card reforms.