Credit Card Reform
There’s some really good news on the horizon as the Federal Reserve proposes a series of reforms for credit cards and overdraft services that will definitely help consumers.
Highlights of the reforms include
- Banks would be prohibited from increasing the rate on a pre-existing credit card balance (except under limited circumstances) and must allow the consumer to pay off that balance over a reasonable period of time.
- Banks would be prohibited from applying payments in excess of the minimum in a manner that maximizes interest charges.
- Banks would be required to give consumers the full benefit of discounted promotional rates on credit cards by applying payments in excess of the minimum to any higher-rate balances first, and by providing a grace period for purchases where the consumer is otherwise eligible.
- Banks would be prohibited from imposing interest charges using the "two-cycle" method, which computes interest on balances on days in billing cycles preceding the most recent billing cycle.
- Banks would be required to provide consumers a reasonable amount of time to make payments.
The proposal is open for comment for 75 days, starting May 2, 2008.
To read the information on the Federal Reserve Board site and to submit your comments, click here
May 5th, 2008 at 9:01 am
Good Blog. I will continue reading it in the future. Nice layout too.
Aaron Wakling
May 5th, 2008 at 9:10 am
[…] Yielding Wealth | Personal Finance wrote an interesting post today onHere’s a quick excerptThere’s some really good news on the horizon as the federal reserve proposes a series of reforms for credit cards and overdraft services that will definitely help consumers. Highlights of the reforms include Banks would be prohibited from increasing the rate on a pre-existing credit card balance (except under limited circumstances) and must allow the […] […]