Credit cards are easy to swipe and it shows.
The average household is $10,000 in debt; and to help consumers, credit card companies now must be more upfront and follow a new set a rules under the "CARD act."
Among some of the changes, credit card companies are required to give the consumer 45 days notice before they change the interest rate on the card. Bills must be mailed at least three weeks before the payment's due. In addition, credit card issuers can't raise rates for one year when consumers open a new accountl; and if the company raises rates on existing accounts, that new rate applies only to new purchases, not the old balance.
The due date must be the same each month and if the consumer is under 21 years old, they will need a co-signer to receive a credit card.
President of Vision Credit Education, Inc, Kenneth Long, said he's happy there's more protection if consumers make a late payment, and they will know on their statements how long it will take them to get out of debt, with interest.
"One thing that may cause their jaw to hit the floor is the calculation of how much they're going to pay if they just make minimum payments," Long said. "There was definitely way too much credit out there to begin with and now I think this is a necessary correction."
Executive Vice President and Counsel of the North Carolina Bankers Association, Paul Stock, said he thinks the disclosure parts of the law will "work very well." But he said consumers can expect a return of certain fees.
"You'll have annual fees, I think that will be pretty typical," Stock said.
He said he is concerned the new rules will prevent people from getting credit.
"Sometimes that may actually be a blessing for somebody that all they're going to do is dig the hole deeper; but there's some people at the margins there, who probably would have been better off if they could get some credit," Stock said.
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