Quick Tips with Denise A. Manniello

Restrictions on rates and fees:
This new legislation will restrict credit card companies from increasing rates and fees on existing balances. If your credit card company raises your interest rates, the newly raised rate will apply to your new charges but not to your preexisting balance. Avoid getting charged fees by always paying bills on time, even if you’re only paying the minimum monthly balance. Timely bill payments help keep your credit score from suffering, too. Keeping the balance below your total credit limit will also help lenders view you more favorably.

No immediate changes:
The new law won’t go into effect for nine months. Meanwhile, banks may still raise interest rates on existing balances. A smart move now would be to start or continue monitoring your credit so you’re aware of balances and debt as well as fees, rates and interest charges.

Curbing of caps and fees:
The new legislation doesn’t completely cap credit card fees and interest rates. For example, the regulation doesn’t set limits on the charges that may come with your monthly statement. It does, however, ban late fees if the issuers had delayed crediting the payment. It also requires banks to give consumers at least 21 days notice when sending bills. You’ll have more time between a bill’s receipt and its due date, but make sure you stay on top of bills to avoid late charges and lower credit scores.

No more rate raise surprises:
Credit card companies must now alert customers 45 days before interest rate increases. They’re also required to give notice of significant changes to a card’s terms, so that companies can’t completely alter rewards programs without warning on customers who have been participating for years in a rewards program. Be sure you understand a credit card’s terms before you agree to anything—read all the fine print.

Harder to get credit for some:
Credit card companies will be required, under the legislation, to consider a consumer's ability to pay when issuing credit cards, which could make it harder for some to get credit (but could also protect them from getting in over their heads). And it limits how issuers can offer credit to those under 21 without verification of their ability to pay or parents' permission. It makes great financial sense to keep aware of how lenders view you, so start or continue staying on top of your credit report.

Does The Credit CARD Act (Credit Card Accountability, Responsibility and Disclosure Act of 2009) Mean Anything For You?