Last year the government passed laws that reformed the credit card industry. I’ve been recieving tons of notices regarding the change a ton of credit cards and I’ll detail some of the important changes I find worth discussing below.
A few restrictions include over-the-limit fees and the marketing of credit cards to adults under 21 particularly on college campuses. I guess the days of getting a free t-shirt for a credit card application are over which was a horrible deal anyway. Credit cards can not be issued to individuals under 21 unless they have an adult co-signer or have proof of income to repay the debt. I’m glad this didn’t come to pass earlier as I got my first credit card at 19 and have been using credit more than responsibly. I guess at 18 you’re old enough to vote and enlist in the military but you can’t purchase alcohol or sign up for credit cards on your own.
Any payments above the minimum payment due will be applied to higher interest rate balances first. In the past credit card companies would offer plenty of promotional 0% balance transfer offers in the hopes that a percentage of the cardholders would not repay the funds by the end of the promotional date or put regular purchases on the card that would accrue interest. I guess the days of plentiful cheap 0% money are over now that most card issuers have less incentive to offer them.
You won’t be charged for spending over your credit limit unless you authorize it, 45 day notice before interest rate hikes and more. I never understood why the credit card companies thought they could pull off letting consumers be able to charge over their credit limit and then charging them a hefty fee for it while calling it a “service”. I don’t particularly care about the interest rate provisions because I never carry a balance unless it’s beneficial for me to do so.
Most of this legislation basically protects consumers from themselves. A great deal of consumers in this country are devoid of any financial common sense and hence the support for these regulations. People cry foul when the credit card companies make money off terms specifically defined in their terms and conditions.
Laws like these generally do benefit more people than they hurt.The people who dont’ bother to read the fine print or practice responsibility with their finances outnumber the fiscally responsible individuals greatly. I fall into the minority in these laws don’t help me in any way whatsoever because I’ve been part of the responsible crowd.
Recent Comments