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Know How the New Credit Card Rules Affect You?
Ryan M. Bray, MST, CPA
Senior Manager, Tax Services
July 13, 2009
Only interest on debt grows without rain, according to an old proverb―although the same might be said of credit card fees and minimum payment requirements.
Maybe you're one of the millions of Americans with credit card interest rates that just increased for no apparent reason, despite the fact that payments were always made on time. Or your credit card's minimum payment amount just shot up, as the issuer raised the minimum payment requirement from two percent to five percent. Perhaps your credit card's balance transfer fee just increased―many banks have recently increased it from three percent of the amount transferred to four or five percent with no maximum.
Just how much do you know about your card issuer's ability to change your terms and increase your payments?
In an effort to enhance transparency, accountability, and mutual responsibility for credit card debt, Congress recently passed and President Obama signed the Credit Card Accountability, Responsibility, and Disclosure Act―also known as the Credit CARD Act. The Act's new rules are effective February 22, 2010, with a few exceptions.
It's important to note that the new law is not applicable to business credit cards. The rules apply only to cards that are issued to consumers, including small business owners who use their personal credit cards for business purposes.
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