banktime.com

The CARD Act is officially in place, effective last Monday. The Credit Card Accountability, Responsibility, and Disclosure Act was signed into law by President Obama last Memorial Day. The nine month gap between the ratification and enaction of this new legislation was fraught with controversy, as the biggest credit card companies in the nation attempted en masse to change their fee structures to something more favorable for themselves. In the past few months, consumers across the nation have seen massive fee hikes, credit line decreases, and general policy changes that are very much not in their favor. Experts are advising American credit cardholders to keep a close eye on their plastic in light of the new changes coming down the pipe, and to familiarize themselves with the new rules.

Expect that your credit card issuer will be mailing you information about the new rules. This means that you must necessarily pay more attention to your mail. Don’t expect this mail to be particularly notated – it will probably come in a very ordinary-looking white envelope.

The new laws affect the disclosure of credit card information that affects consumers. It is meant to make our lives easier and to make credit card companies more responsible in their term disclosure. In reality, however, the law really just means that card companies will have to scramble for new ways to make money. This means that new fees are likely to become a normal part of life. After all, the law doesn’t impact fees. It does restrict banks from arbitrarily raising interest rates, and requires that customers be at least two months behind on their bill before they can be penalized. Credit card issuers are also now obliged to apply any payments over the minimum each month to the highest-interest balance on your card. Also, your bill must be mailed to you no less than three weeks before its due date.

All this consumerism has already begun to be balanced by an (un)healthy dose of negativity, however. Card companies have begun adding a slew of fees, as mentioned – inactivity fees for those who don’t charge enough on their cards annually, and annual fees for many customers who have never had to pay them. Existing fees, such as those penalties for going over your established card limit, are increasing to make them more lucrative for credit card companies. After all, banks have historically make the lion’s share of their profits from plastic fees – do you honestly think that the execs are going to sacrifice their bonuses just because of some pesky Congressional decision-making? The only good news is that banks are required to give you advance notice that these fees are coming, under the CARD Act’s terms. That’s why it is so very important that you pay attention to your mail to catch any communications from your bank. These notifications will take the form of a letter. Also pay close attention to your credit card statements in coming months, to make sure that your bank is following the rules and applying payments to your account correctly.