First Phase of the New Credit Card Rules Is Now In Effect

Credit card holders now have the right to opt out of increases to interest rates and fees. If you choose to opt out it means that the card issuer will cancel your account, but it enables you to pay off your existing balances under the old terms. This is favorable for the consumer, but also shows the importance of having credit cards from at least 2 separate card issuers in your wallet. If you rely on credit cards until your next paycheck, you may want to think twice before choosing to opt out. Keep in mind that if you have a variable rate credit card it means that your rate is tied to the prime rate. A change to this prime rate is the result of a Federal Reserve decision and you can not opt out of these changes.

The new rules also require the card issuer to give 45 days advance notice of changes to their credit card terms. It used to be that only 15 days notice was required. You now have at least 21 days to pay the monthly credit card statement before late fees will be applied. This is 7 days more than the old requirements of 14 days.

Next phase of the credit card rules will be implemented in February 2010.