America's New Rules For Credit Card Providers

Discover what new credit card rules have been introduced by the U.S. Federal Reserve to protect the consumer. See how much fairer the new system is and how the consumer will benefit.

Beginning on February 22, 2010, the Federal Reserve introduced new credit card rules for credit card companies to better protect the consumer.

These are the main changes:

Your credit card company has to tell you:

When they plan to increase your rate or other fees

Your credit card company must inform you 45 days in advance if they are going to:

• increase your interest rate
• change certain fees that apply to your account
• make changes to the terms of your card

This 45 day credit card rule is so that you can cancel the card before change take effect. If you do cancel, the company may require you to pay the balance sooner, or double the percentage of your balance used to calculate the minimum payment.

The 45-day advance notice does not apply if:

• you have a variable interest rate tied to an index
• your introductory rate expires and the revert-to rate kicks in
• you are in a workout agreement and you haven’t made your payments

• you have a variable interest rate tied to an index
• your introductory rate expires and the revert-to rate kicks in
• you are in a workout agreement and you haven’t made your payments

This credit card rule will tell you how long it will take to pay off your balance if you only make minimum payments, and also how much you need to pay each month to pay off your balance in three years.

New credit card rules regarding rates, fees, and limit

No interest rate increases for the first twelve months

This credit card rule does not apply in the following circumstances:

• Your card has a variable interest rate tied to an index
• There is an introductory rate for 6 months; after that the revert-to rate can kick in
• You are more than 60 days late in paying your bill
• You are in a workout agreement and you don’t make your payments

Increased rates apply only to new charges

After the first year, any new rate will only apply to new charges you make. Your old interest rate will apply to any existing balance.

Restrictions on over-limit transactions

This credit card rule means that you cannot be charged a fee unless you tell your credit card company you want them to allow transactions that would take you over your credit limit. Even then, they can only impose one fee

Protections for under 21s

Persons under 21 must be able to show that they can make their payments, or they will need a co-signatory to open the account.
Changes to billing and payments

Standard payment dates and times

This credit card rule states that you must receive your bill at least 21 days before payment is due. Plus, the due date should be the same date each month, the payment cut-off time cannot be earlier than 5 p.m. on the due date, and if your payment due date is on a weekend or holiday, you will have until the following business day to pay.

Payments directed to highest interest balances first

This changes the existing credit card rules by stating that if you make more than the minimum payment, the excess amount must be applied to the balance with the highest interest rate.

No two-cycle billing

Credit card companies are only allowed to charge interest on balances in the current billing cycle.

Credit Card Offer Comparison

		Interest Rate (p.a.)	Balance Transfer Rate (p.a.)	Annual Fee	Cash Advance Rate (p.a.)
Bankwest Breeze MasterCard	A low interest rate on everyday purchases with a low balance transfer offer	0% for 4 months (reverts to 11.99% )	0% for 6 months	$59	21.99%
Citibank Clear Platinum Card	A low interest rate offer on balance transfers and purchases	0% for 6 months (reverts to 11.99% )	0% for 6 months	$49 annual fee for the first year ($99 thereafter)	21.74%
St.George Vertigo	An introductory offer on balance transfer and a low annual fee	13.24%	2.99% for 6 months	$0 annual fee for the first year ($55 thereafter)	21.49%
Virgin Australia Velocity Flyer Card	Earn 1 velocity point per $1 spent, plus an introductory offer on balance transfers	20.99%	2.9% for 6 months	$129	20.99%
Westpac 55 Day Credit Card	No annul fee for the first year with a low rate on balance transfers and purchases	0% for 5 months (reverts to 19.59% )	0.99% for 9 months with 1% handling fee	$0 annual fee for the first year ($30 thereafter)	21.49%