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Read All About The New Credit Card Laws 2010

New Credit Card Laws 2010

Reasons for changes in Credit Card laws:

Credit Card laws in 2010 were altered to organize and ultimately change the way credit card companies and lending institutions issue and subsequently charge a consumer for accessing a credit card or other form of financing. Credit card laws (2010) were implemented, because the recession in 2008 was sparked by the country’s over-extension; millions of Americans, as a result of the lending institutions de-regulation, took-out credit cards and purchased more than they made on goods and services.

This process ultimately led to a spike in foreclosures and defaults. As a result of the deregulation, not only were credit cards easier to secure, but the rates and fees attached to these sources of financing were exorbitant. To mitigate the effects of the credit crisis and to adequately regulate the lending market, President Barack Obama instated new credit card laws (2010) to make fees more transparent, to implement a more stringent application process and to create a more flexible payment schedule.

New Credit Card Laws in 2010:

President Obama’s new credit card laws (2010) will make credit cards more transparent; the terms and fees attached to credit cards, under these new laws, will be easier to understand for everyday consumers. Credit card companies are now required to offer their holders an advanced notice of changes in their credit card terms. Including in these terms are fewer penalty fees, interest payments and late charges.

To prevent the over-extension of credit—one of the predominant factors that precipitated the economic collapse—new credit card laws will make the ability to obtain credit cards more difficult. Prior to 2008, credit card companies would issue credit cards and sources of financing with little regard to the individual’s credit history or rating.

Those individuals with low credit scores or a lack of credit history would be given a credit card with a high interest rate or APR—issuers would give these cards with a low credit amount as a way to profit off risky borrowers. In addition, debts were commonly packaged and sold as CDO’s—a profitable economic mechanism that eventually failed and fueled the recession. As a result of the mass defaults, the issuance of credit cards will be placed under a more stringent scope; those individuals with low credit scores or low-income families will typically be unable to access a line of credit.

New credit card laws will also allow the holder to pay-off their bills immediately. These no credit card laws essentially do away with the month-long grace period that was typically attached to a holder’s credit card bill.

More time to pay monthly bills:

One of the more important factors of the new credit card laws (2010) required that credit card issuers give account holders a reasonable amount of time to make payments on their monthly bills. These new credit card laws (2010) require that payments will be due at least 21 days after they are delivered or mailed.

The alterations in payment dates were a result of mass complaints revolving around sudden changes to due dates without notice—when due dates are moved up, the holder is given less time to pay their bills, ultimately increasing the likelihood of late fees. Furthermore, new credit card laws 2010 regarding payments require issuers to no longer set early morning or other arbitrary deadlines for payments—all cutoff times established before 5 p.m. on the payment due dates will be illegal under the new credit card laws 2010.

All payments due at those times or on weekends/holidays or when the issuer is closed for business will not be subject to late fees.

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