Editor’s Note:  This post, which went live in December of 2008, is getting a bit dated.  It deals with the original proposals and is, in essence, an historical document detailing the original plans for new credit card laws.  For more relevant (and recent) news on the new credit cards laws, please see New Credit Card Laws and Interest Rate Increases, a recent post dealing with the new laws set to come into effect February 22nd of this year.

In a move the American Bankers Association called, “unprecedented,” Federal regulators passed new credit card rules that will help struggling consumers in 2010.  To be more precise, July of 2010.  In other words, 18 months from now.  Stated differently, in the not too distant future.

Local news anchors and financial writers have been praising these new rules that will help consumers against the evil credit card companies.  They don’t seem to be stressing the fact that this help will not arrive until 2010.  Have I mentioned that yet?  For the next 18 months, everything stays the same.  Credit card companies will continue to raise interest rates and cut credit limits.  Credit availability will continue to decline.  And your credit card company will continue to make a fortune off your debts.

However, if this was June of 2010, relief would be on the way.  It is not.  It is December of 2008 and while consumers battle through unprecedented economic turmoil, nothing will be done to rein in the practices of your friendly credit card company.

Fortunately, the new credit card rules will take effect in a little under 470 days (and counting) and then things may start to improve.  For some people.  The rules that will come into effect 6 months after the start of the next decade may actually hurt many consumers.  For example, some experts say individuals with below average credit may not be able to obtain “subprime” cards which, while loaded with fees, can help rebuild credit scores.

Even those with good credit could get hurt by these rules (a long time from now).  For example, credit card issuers may (and I imagine they will) find new ways to extract extra dollars from consumers.

Nevertheless, when summer of 2010 roars around, banks will be prohibited from:

–Placing unfair time constraints on payments. A payment could not be deemed late unless the borrower is given a reasonable period of time, such as 21 days, to pay.

–Placing too-high fees for exceeding the credit limit solely because of a hold placed on the account.

–Unfairly adding security deposits and fees for issuing credit or making it available.

–Making deceptive offers of credit.

Additionally, and number one in the too little, way too late category, credit card companies will be required to give consumers 45 days notice before any changes are made to the terms and conditions of a card agreement.  This will surely help out the millions who have had their interest rates raised for no apparent reason.  If, of course, it were 2010.

In a time of economic chaos, our government has once again shown us that it can stand up to big business and deliver citizens the help they need.  Unfortunately, that help isn’t arriving when we need it most.  And that time is today.

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