Fed Passes New Credit Card Rules

For years congress has been trying to pass a Credit Card Bill of Rights but the Senate repeatedly shoots it down. The Federal Reserve knew something had to be done so they took matters into their own hands on Thursday and set guidelines for the most controversial practices creditors do today. Some of the highlights are:

  • Unless a payment is more than 30 days late, creditors will no longer be able to change interest rates on existing balances.
  • There must be at least a 21 day grace period to make a payment before the credit card company can slap you with a late fee.
  • Currently when you make a payment, it is applied to the lower interest rate balances first (such as 0% balance transfer offers) before it is applied to your higher interest rate balances such as normal purchases. Once the rules are in effect, it will be the opposite, and all payments (beyond the minimum payment) will be applied to the higher interest rate balances first.
  • Customers must be notified 45 days before any changes to terms, such as fees and APR. Currently credit card companies are only required to give a 15 day notice.
  • Double Cycle billing is prohibited. This is a practice where some creditors calculate interest based on the balance of the previous two months. So you may pay off your balance one month, but the next month if you carry a balance, you would be charged interest for both months.

Unfortunately, these rules won’t go into effect until July 2010. If you agree with us that there needs to be reform before then, contact your congressman and senator to tell them how you feel.

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Unfortunately, people are finding out too late just how sneaky these guys really are!


We the American people bailed out the Banks and they want to continue to make a profit off of us with interest , interest should be at savings account levels plus 2%

Why should we pay 30% you can never pay your debt off.


I agree that this bill is long overdue. In Australia our tight regulations on finance have saved us from the world credit crisis.

Rates are going to go up then to make up for the less money they’ll be be making I know it will

Really this should have been done long ago. There’s no reason why all these deceptive billing practices should have been allowed to go on as long as they have.

You know what they say, better late than never!