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Credit Card Reform Is Around the Corner

Consumers trapped by unjust credit card rules will greatly benefit under the proposed new lawby Craig D. Robins, Esq.
 
Many consumers have been virtually forced into bankruptcy by the unfair policies of credit card companies.  Because of new legislation, many of these unfair policies will become history.
 
 
The United States Senate voted today to put new restrictions on the entire credit card industry by passing a bill that will treat consumers more fairly.  The proposed law places new restrictions on credit card fees and interest rate policies.
 
The vote, which was 90 to 5, was overwhelmingly in favor of consumers.  It is much stronger than a version recently passed by the House.
 
As a Long Island bankruptcy lawyer, I see many clients who are caught up in a bad-debt situation because of the unfair and unjust ways the credit card companies have treated them.  Soon it will be good-bye to credit card provisions that double interest rates and penalize the average consumer who falls a little behind.
 
It is expected that the House and Senate bills will be reconciled very quickly as President Obama previously announced that he wanted to sign it before Memorial Day.
 
The following are the key protections that the bill will afford consumers.
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¶There are new restrictions on when credit card companies can increase the interest rate on balances you have already run up. The bill says that banks generally must wait until you are 60 days late in making the minimum payment before applying a penalty interest rate to your existing debt.

¶Card companies will have to give 45 days’ notice before raising their interest rates.

¶Banks must send out your bill no later than 21 days before the due date. 

¶If the card company gets your payment by 5 p.m. on the due date, it’s on time.  Also, no more late fees if the due date is a Sunday or holiday and your payment doesn’t arrive until a day later.

¶If you are paying different interest rates on the debt on a single card — one for a cash advance, another for a balance transfer and a third for new purchases. Now, when you make a payment over the minimum balance, banks will have to apply it to the highest-interest debt first.

¶Banks will need your permission before allowing you the “privilege” of spending more than your credit limit and paying a fat $39 fee for that privilege.

¶Students will find it more difficult to get a credit card. No one under 21 will be able to have a credit card unless a parent, legal guardian or spouse is the primary cardholder. However, students with their own income can submit proof and ask for an exception to the co-signer requirement.

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