A summary of the new credit card law

The Credit card accountability, responsibility and disclosure law goes into affect on August 20,2010 The laws are supposed to protect consumers from abusive practices by credit card companies. However, it may be a case of too little to late. The laws was passed in Frebruary of this year.. The six-month lag for its enactment gave credit card companies adequate time to adjust fees and position themselves before it becomes operative. The law does not address the biggest problems consumers have which is too much debt and it merely may be a government effort to quell public outcry over abusive tactics by these companies..

Here are the highlights of the new law:

• Retroactive rate increases - Issuers can't increase interest rate unless promotional period has expired. . Cardholders cannot be punished for universal default, anytime or any reason clauses and for non-related accounts. When a cardholder demonstrates that he has paid on time for the past 6 months, the issuer must restore the lower interest rate.
• Notice of Rate Hike - establishes a 45 day period for key contract changes and rate hikes. This does not apply to credit card limit changes. The laws does not specify a limit on interest rates. They can still triple your APR>
• Fee Restrictions - Cardholders cannot receive overlimit fees unless they agree the overlimit transactions.
• Restrict Credit Cards to under 21 - Those under 21 who can't prove means of income must have a co-signor 21 or older to get approved.
• Double billing cycle - the practice were interest charges are based on current and preceding balances or double billing is terminated.
• Fairer payment allocation - int the current system payments are applied to lower interest balances than to the high one, the law reverses this procedure.
• More time to pay - The period in which the statement is received prior to payment is extended from 14 to 21 days.
• Gift Card protections - gift cards does not allow gift card from expiring for a minimum of 5 years.

The new law does provide some protection for the consumer, although it could be argued that it does not go far enough. Additionally, credit card companies have had plenty of opportunity to raise rate and other fees favorably prior to the law becoming enforceable. As a result the impact of th law will not be as great as had been anticipated.

This law does not help those that cannot meet their monthly obligation or are having a tough time with their debt. For them debt relief programs such as debt consolidation and debt settlement which offer the only real hope to be debtfree.

This law does not help those that cannot meet their monthly obligation or are having a difficult time with their debt. For them debt relief programs such as debt consolidation and debt settlement offer the only real options to be debtfree.