Looks like credit card issuers are playing a tough game of defense against sweeping legislation set to take effect Thursday. Provisions of the Credit Card Accountability Responsibility and Disclosure (CARD) Act will be implemented this week and it has card companies rushing to hike interest rates.
Starting this week, card issuers need to give consumers 21 days advance notice for bill payments due, instead of the current 14-day notification period, writes personal finance guru, Terry Savage. This change will mean fewer people will get hit with late fees.
Also set to go into effect on Thursday, card companies will be required to give you 45 days advance notice on rate increases, instead of the 15 day advance notice. The final pieces of the bill will take effect February.
The changes come as American Express customers received unwelcomed news Friday. According to the folks at Consumerist, American Express Blue is raising rates on all customers. The rate change will take effect Oct. 1.
Consumerist rounded up the changes and new interest rates for card holders (Note, this is just one example, and the increases vary among customers.):
–Standard APR is going from fixed rate 11.99% to prime rate plus 11.99%. The rate as of Aug 1 is 15.24% (this is applies to new purchases and all previous balances).
–APR for cash advances will be 21.99% plus prime.
–APR for late payments will be 23.99% plus prime.
–Late fees for less than $250 will be $19 and $39 for $251 and higher.
In other credit card news, American Express and Discover announced last week that theyâ€™re nixing over-the-limit fees.
Whatâ€™s your recourse? Well, you can pay down or get rid of your debt. I know, simply stated yet more difficult to actually do. But as Savage says, credit card holders are at the mercy of card companies as long as they carry a balance.
If you think your interest rate has been unfairly raised, you can file a complaint with the Federal TradeÂ Commission for further investigation. You can also call Help With MyÂ Credit at 1-866-941-1030 and speak to an operator who will provide information about contacting credit card issuers and accredited credit counseling agencies. The organization was started by card issuers and financial institutions to educate and assist struggling card holders.
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Renita Burns is the editorial assistant at BlackEnterprise.com.