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Will consumers get relief with new credit card rules?

 
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2008-12-14 09:34

Frank K
Colorado Springs, CO

Posts: 12
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Reuters reports (Dec 13, 2008) that credit card reforms being voted on this week may bring some relief to customers who face a variety of ways for being hit with late fees, universal defaults, shorter payment periods and confusing payment allocations for different balances.

Credit card asset-backed securities face increasing stress as more consumers fall behind on payments. Credit card companies have warned that interest rates charged on credit cards will rise for all borrowers and that borrowing limits may be reduce because of the changes.

However, the new rules are expected to prohibit credit card companies from increasing rates at will, with some exceptions such as those that apply to people who fail to pay a bill within 30 days. So-called universal default, which permits changing card terms if the borrower defaults on another bill such as utilities or a gym membership, also is expected to be banned. And double-cycle billing, in which card companies reach back to earlier billing cycles to help calculate interest charged in the current cycle, also is expected to be eliminated.

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