Many average Americans, including the 40 percent with excessive credit card debt, have been asking “Where is my bailout?” This is in reaction to the $700 billion Wall Street bailout. The answer is that we won’t get a bailout, but gradually some credit card rules will change in consumers’ favor, bringing them some credit card help.
As a result, more of us should be able to meet or even exceed those troublesome minimum payments. The question now is whether credit card help will arrive soon enough to reduce credit card debt, because the credit card companies have until July 1, 2010, to comply.
Here are some of the new credit card rules:
- Your credit card debt monthly statement will provide 21 days to pay, rather than 14 days. The credit card company also has to warn you at least 45 days in advance of a rate hike, instead of a mere 15 days.
- Universal default clauses will finally end, making it impossible for your credit card company to raise your interest rate just because you missed a mortgage payment or car payment elsewhere. Chase and Citi credit cards already have canceled this practice, while Bank of America credit cards claim to have neverr used universal default clauses in the first place.
- You no longer will be nailed by the double-billing cycle, which was a gimmick to raise what previously was your average daily balance.
- You won’t get stuck with over-the-limit fees that occur because somebody, like a gas station or a restaurant, has placed a block on your card, or because you use the card again before the credit card company has taken its good old time to record your previous payment. However, you still can get nailed by a $45 late fee on a $5 balance or be charged $15 for paying by phone.
Reforms in credit card rules are the result of a 5-0 Federal Reserve Board vote shortly before the holidays. The House of Representatives had passed a strong bill to reduce credit card debt, but the Senate stalled on the matter.
Advocates of more reforms in credit card rules say they will resume a legislative push in January, but they expect continued opposition from credit card industry lobbyists.
By the way, analysts say national credit card debt exceeded $1 trillion at some point during the holiday shopping season. That’s a large sum, but not a whole lot larger than the Wall Street bailout. The headline on a Los Angeles Times column by David Lazarus last Sept. 28 asserted, “Banks love bailout, hate credit card curbs.”
Credit card companies like American Express and CitiBank are sending out more than 6 billion pitches by mail each year, up from 1 billion in 1990. They will continue to tempt consumers into credit card debt, although they may start to promise that credit card rules have become simpler.
