The Federal Reserve Board has implemented some substantial rule changes that govern how credit card companies interact with cardholders.
I am PUMPED about some of the rules changes, but I am disappointed that most of these will not be implemented until July 2010.
Here are some rule changes that I am excited about:
- Double cycle billing is eliminated. This eliminates double-billing on interest (robbery).
- Can’t raise rates unless payments are more than 30 days behind. Provides some margin for error before default rates go into effect.
- Payments will be applied to highest interest balances first. YAY!
And here is my personal favorite – No more universal default rules! This means that credit card companies can not raise your rate on a card that has been paid on time simply because you have paid late on another credit card!
You can read a complete article about the credit card lending rules at CNNMoney – HERE.
As a reminder, there is a way to prevent credit card companies from controlling your life – PAY THEM OFF!!! If you are carrying a balance on your credit card and are paying interest, it can be very worthwhile to transfer the debt to 0% balance transfer credit cards so that ALL of your payment is applied to principal. PAY THEM OFF, and apply the first rule of holes – stop digging! No more debt.