New Credit Card Laws

This week on the Suze Orman show she talked about the new credit card laws BUT they don't go in to effect until July 2010. So Suze says (and I agree) it's a case of too little, too late.

1. No more Universal Default
Currently if you are late on one card the other cards can raise your rate. They will no longer be allowed to do this.

2. End to raising interest rate increases for no reason
Credit card companies will no longer be able to raise your rate for the heck of it. You will have to be over 30 days late for them to be able to raise your interest rate.

3. No more double-cycle billing
Say you charge a $1,000. You get the bill and you pay 900. The next month all you owe is $100 but the credit card company still charges you the interest rate on the full amount of what you originally charged. So they are charging you interest on the $1,000 and not just the $100 you owe. That is a double-cycle billing and will no longer be allowed.

4. Payments will apply to higher interest rate balances first
Let's say you have a $1,000 on your credit card that are purchases with an APR of 15%. But you also have a balance transfer on your card of $1,000 with an APR of 3%. Right now when you make your monthly payment the money goes towards the part of your balance that has the lower APR. So the interest on your higher APR balance is still growing and doesn't decrease until you pay the lower APR balance first. That is going to change. The payments you make will be applied to the higher interest rate balance first.

I'm glad these much needed changes are coming in 2010 but why can't they be enacted sooner. I'm sure the credit card companies are boo-hooing that they need time to update their computer billing systems in order to properly bill customers. But in this age of technology they shouldn't need over a year to update their systems. Congress should force them to do it in the next 3-6 months. This year is already off to a terrible start. Citigroup is probably going to fold so credit card relief of this kind needs to be implemented immediately not in 2010...as Suze said by then it may be too little, too late. I don't even want to IMAGINE what the state of the economy might be by then.