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January 9, 2010

5 Things to know about the new credit card law

Chris Day

1 Written notice

of rate changes

Creditors must provide written notice to consumers at least 45 days before increasing an interest rate or making a significant change in account terms.Consumers can cancel the credit card before the increase or change takes effec

2 The 21 day rule

Credit card companies now must allow at least 21 days between the time a statement is mailed and when the payment is due. And the statement will look a lot different. The monthly bill would include an estimate of how long it will take to pay off the bill if you make the minimum payments. It also will include a year-to-date summary of overdrafts, fees and interest which will allow consumers to see the credit card’s true cost.

3Credit cards

and college students

Credit card companies can’t target consumers under age 21 unless the consumer submits a written applications containing the signature of a co-signer who can repay any charges on the account, or shows financial information that there is an independent way of repaying the debt.

4 Annual fees and charges

The days of no annual fees are likely gone for consumers. Credit card companies also will be allowed to charge a fee to consumers who don’t use their card or don’t charge a minimum amount per year. If you have a credit card, use it and pay it off right away.

5 When do the changes start?

The Credit Card Act of 2009 kicks in on Feb. 22, and will greatly benefit consumers. It’s important for consumers to read all of the material that comes with their credit card statements. Consumers who see new fees on a statement should call the company and ask for an explanation.

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