Credit Card Reform Act

The credit card reform act went into effect yesterday. It’s a major makeover, so let me make it simple to understand and highlight some of the benefits:

They simplified the fine print, which means that your statements will now show how long it will take you to pay off your balance.

New cards cannot hike up your interest rate on existing balances unless your introductory teaser rate expires or you are at least 60 days late. And they must give a notice 45 days before they can increase your interest rate.

One of the biggest changes will impact your under age kids. They will either have to show proof of income or you will have to co-sign their credit card application. But when you do, it will become your debt also. So, a better option for them may be a prepaid debit card. Remember, this is about helping young people becoming responsible with credit card debt.

All of these things are supposed to keep money in your pocket but keep in mind that these changes are only for consumer credit, not business credit cards.

Despite the simplified fine print you still want to read it very carefully and understand exactly what you are signing up for.