A:Under the current law, a credit card company may raise the rate on new or existing balances provided that they give you notice and 15 days to "opt out" of the increase. he notices are often buried in the midst of other promotional materials and are generally written by lawyers using language that is difficult to understand and is printed in the smallest allowable font. As such, the disclosures are not particularly obvious.
Under new legislation, called the Credit CARD Act (which will go into effect in February of 2010 – although a few provisions will become effective this year), credit card companies will not be allowed to raise the rates on existing balances unless the borrower fails to make timely payments and goes delinquent with that particular credit card company. For much more information on all aspects of the new credit card legislation, check out our Credit Blog for posts on the subject.
Labels: APR Increase, Credit Card Act, Interest Rate
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