Giving plastic a makeover
Highlights of new credit card rules taking effect in July 2010:
Interest rates: Card issuers can't apply interest rate hikes to existing balances except in certain circumstances, such as when a payment is more than 30 days late. For accounts open at least a year, consumers must be notified 45 days before any changes are made to the terms, including higher penalty rates for late payments. Currently, many companies offer only 15 days notice.
Late payments: Late fees could not be charged without giving consumers at least 21 days to make a payment.
Allocating payments: Many cards charge different rates for different balances, such as purchases and cash advances. Card companies must apply any payments beyond the minimum to the balance with the highest interest rate or spread them proportionally to all balances.
Double-cycle billing: Issuers can't count paid-off balances from prior months in assessing finance charges for the current month.
Subprime credit cards: For cards issued to people with weak credit, card issuers cannot assess security or opening fees that exceed 50% of the initial credit limit.
Source: Times research
