New regulations in the USA on the credit card industry come with some relief for customers, but they do not solve all problems, by a long shot.
Under the new laws, they will not be able to raise interest rates on existing balances except under certain conditions; they will have to give 45 days advance notice before making signficant changes to account terms; and they will not be able to raise interest rates on customers accounts based on a customer’s late payment to other, non-related accounts.
So why won’t the new laws offer universal relief to credit card owners? Partly because the credit card issuers are businesses and want to make the most money they can, and now that some of their predatory practices have been reined in, they will find new ways to make as high a profit as possible.
And part of this is because new laws don’t change consumer behavior. It will still cost people if they pay late or if they run up too high a balance.
Issuers are allowed to charge annual fees for the use of credit cards. Right now, many issuers do not do that. They are likely to start doing that.
They also are likely to offer less reward cards, and may require that credit card bills be paid immediately instead of allowing the previous 25 to 30 day grace period.
And they can still charge late fees and raise interest rates if customers are late paying their credit card bill.
All in all though, if consumers act responsibly and read the fine print they will be fine. Don’t charge more than 20 to 30 percent of your credit limit, and send your bills in on time, and you can avoid fees and rate hikes.
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