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Understanding the Credit Cardholders Bill of Rights
Allocation of Payments
When a payment is made, any amount above the minimum must be allocated to the balance with the highest interest rate attached to it. In the case of a deferred interest program, the entire amount in excess of the minimum payment must be applied to this balance in the last two months of the deferred interest program.
Double-Cycle Billing
This method of billing looks at both the current and previous balance when computing the average daily balance. If the average daily balance from the previous billing period is higher than the current period, this will lead to the consumer paying a much higher finance charge.
As of February, 22, 2010, credit card issuers can no longer assess finance charges against balances from previous billing cycles that have already been paid.
Due Dates and Times
- Due dates for monthly payments must be the same day each month
- If your due date falls on a weekend or holiday, any payments credited to your account on the following business day must be accepted as on time
- Any payment received by your creditor by 5:00 p.m on the due date must be considered on time
Changes by Card Issuer
If your credit card issuer makes a “material” change to their mailing address or payment processing procedures that will cause a delay in crediting payments to your accounts. Then they cannot charge a late fee during the 60 days following the change(s).
While the Credit C.A.R.D. Act is a huge step in the right direction, it also serves as a reminder that debt is slavery! Matt Jabs over at Debt Free Adventure reminds of that in this excellent article: http://www.debtfreeadventure.com/debt-slavery-what-it-is-and-ways-out/
What do you think about these changes? Do they go far enough? Can more be done to protect the consumer? Did our government go too far with any of these regulations?
Please leave your comment below.
Within the next few days we will take a look at what this act means for those under 21 and college campuses, gift-card holders, as well as the various disclosures that the credit card issuers are now required to make.
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© 2010 – 2012, Khaleef Crumbley. All rights reserved.
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I think these changes are great. I never really paid attention to how sneaky credit card companies were until I started working for one. That experience made me get rid of all plastic. Thank God I have been plastic free for years. It is scary however because these “sneaky” fees are a large portion of their profit. I wonder Is it really the banks fault that “we” don’t read the fine print? Will these changes have a negative affect on the credit market?
Thank you so much for this article. I was reading another one on this topic and really got bogged down with the technicality of the changes. This really made the information clear and understandable. I was reading somewhere else that in spite of these changes, credit card companies are going to hit consumers in other ways – I hope that’s something you’ll be able to share with your readers too! Thanks again.
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