Jun 29, 2009 6:08 pm US/Eastern
Delay In New Credit Rules Hurts Some Cardholders
BOSTON (WBZ) ―
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Jeff J. Mitchell/Getty Images
The sweeping new credit card legislation is considered a major victory for consumers, but those new protections don't kick in until next year. Until then, it looks like many card companies are playing hardball.
Joanne Bailey of Rockland always paid her credit card bill on time, so she was shocked when her credit card company canceled her account.
"It makes me feel like I have no control," she said.
The bank told her the account was closed because of a drop in her credit score.
She started looking into her numbers.
"The one for Experian said 720, which is super," she said.
Joanne said one of the other credit bureaus had a mistake on her credit report, which dragged her score down.
She was also close to her limit. That was enough for the card company to pull the plug.
"I don't think that's right at all," she said.
"They have a right to do just about anything," explained Newton financial advisor Susan Kaplan.
Many credit card companies are clamping down on customers who have never had a late payment.
"Credit Cards have to make everything exactly the way they want it before the 9 months has elapsed and they are subject to new rules," Kaplan said.
Here's a quick look at those new rules:
LIMITS ON INTEREST RATE HIKES ON EXISTING BALANCES
Credit card companies will have to notify you well in advance of any rate hike due to a late payment.
NO MORE UNIVERSAL DEFAULT
That means a bank can't raise the rate on your credit card because you were late paying on a completely different card.
MORE TIME TO PAY BILLS
Card companies have to give you a reasonable amount of time to pay after you receive your bill.
CHOICE ON OVER-THE-LIMIT FEES
Customers will have to agree in advance to pay a fee if they go over their limit. If they don't 'opt-in' to that feature, their purchase will be denied if they are over their limit.
Kaplan says the days of rewards cards with no annual fee are numbered.
"For anyone who has any of these benefits, I would welcome them to use them immediately, before they can be taken away," she said.
Some cards are even tacking on an extra three-percent on foreign purchases.
That could mean a hefty extra fee if you were flying oversees on a foreign airline.
That fee could also be added to Internet purchases for foreign goods.
"The credit card companies are quite profitable," Kaplan said. "They will win; we will lose."
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