Credit Cards: New Fine Print Explained

Now is the time to check and double check your mail in the US. Now that the credit card industry is required to warn you about any changes they’re planning, do not think it is just junk mail it could be very important to you.

Once you have opened your mail, you may discover that your interest rates are rising, or switching from fixed to variable, some card issuers are instituting higher balance-transfer fees and raising teaser rates. The warnings are because of sweeping reforms required by a law enacted this spring that is being phased in over the next year.

The law puts strict limits on how and why issuers can raise interest rates and impose penalties. One law started in August and required credit card companies to notify customers 45 days before any rate increase and give them a chance to cancel the card and pay off the balance at the existing rate.

Starting in February, the law will prohibit credit card companies from increasing interest rates because a cardholder has missed payments on other accounts, a practice known as universal default. To read more on this story go to washingtonpost.com.