Nightly News | August 20, 2009
ANN CURRY, anchor: The first phase of a new set of rules for credit card companies went into effect today, part of an effort to protect consumers from some practices Congress said were unfair. NBC 's Trish Regan now joins us with more on this.
TRISH REGAN reporting:
Hi, Ann.You know, we've already seen credit card companies raise rates ahead of today's changes. Hopefully that will begin to stop. Now, beginning today, credit card companies are going to have to mail your bill out 21 days before it's due. This will essentially give consumers an extra week to avoid any late charges. The other big change, Ann , they must give you 45 days notice before they raise your interest rate . However, this only applies to fixed-rate cards, not to variable-rate cards. And the majority of cards out there are actually variable rate . Now, consumers should also know they have the right to reject an increase in their rate and pay off an existing balance at the current rate. Additional changes are coming in February of 2010 . Some of those include the fact that credit card companies are going to have a whole lot harder time marketing to college students because anyone under the age of 21 is going to need a co-signer for a card. Finally, one of the biggest changes that will happen next year is that banks will only be able to raise your rates on existing balances if you're 60 days late. Still , Ann , I want to point out that this bill does not prevent the credit card companies from simply shutting off your card altogether or from actually limiting your amount to credit. Now, banks are saying saying they need to have that flexibility to shut off cards or to reduce credit limits given that the economy is in such a tough state .
CURRY: That's a lot of change, Trish Regan . Thanks so much for making it clear for all of us.