New Credit Card Regulations Approved Today

I wanted to take a break from answering credit questions to share some positive news that was announced earlier today. I've written before about new regulations on the credit card companies that were pending approval. I'm pleased to say that those new regulations were approved today by the Federal Reserve Board and other regulatory bodies.

Of course, they won't go into effect until summer of 2010 ... so be on the lookout for price gouging from your credit card company! I predict the card companies will do anything and everything to squeeze their customers between now and July 2010. They are already in some sort of financial panic mode, which is why they've been using all sorts of tricks to jack up interest rates and assign penalties on their customers -- even their most responsible customers.

The new credit card regulations take a number of steps designed to protect consumers from such abuses. This is a developing story, so I'll be adding to this blog post throughout today and tomorrow. If you want to learn more in the meantime, check out this CNN story on the new regulations.

Summary of Regulations

Here are some of the restrictions being imposed on the credit card industry by these new (and long overdue) federal regulations:

• No more double-cycle billing, which was a way to apply extra interest on current bills based on previous bills.
• Credit card companies cannot increase the interest rate on balances unless a paid is late by more than 30 days.
• Customers must be given a reasonable period of time in which to make payments. Hopefully, this will also put an end to their most recent trick of changing due dates in order to impose penalties.
• Credit card statements must clearly show the exact date (and even the time of day) that a payment is due. Any changes to the account must be listed in bold, or published separately from the statement to ensure the customer understands the changes.
• The new regulations will also mark the end of "universal defaults" -- a practice through which the credit card companies would increase the rate on all cards issued when a customer only missed a payment on one card.