Consumers and the new Credit CARD Act

* Rule will go into effect February 2010
**Rule will go into effect August 2010

Changes in fees:

•Card issuers may not charge over-the-limit fees unless the customer authorizes this type of transaction. Card customers won't be charged to make a payment -- except under limited circumstances.*

•Payments more than the minimum amount due must apply to balance with highest APR first.*

•Prepaid cards (including gift cards) will have a minimum life span of five years.**

 Changes in interest rates:

•Customers generally must receive a 45-day advance notice for any increase in an interest rate and any change in a significant term. For interest rate increases, the customer has the option to decline the rate increase and pay off the balance over time under the original interest rate.

•Increases in interest rates will only apply to new balances -- except under limited circumstances (ie: if the rate is disclosed at account opening -- promotional rates -- or if a cardholder becomes more than 60 days late on a payment).*

•Interest rate increases are prohibited during the first 12 months of opening a credit card account and promotional rates must last at least 6 months.*

•No more double cycle or single cycle billing permitted for interest rate calculation.*

More detailed billing statements:

•Billing statements must be sent 21 days prior to due date.

•Billing statements must explain the number of months to repay the credit card balance, the total cost if only minimum payments are made and the amount that must be paid to repay the balance in 36 months.*

•Payment due date must be same day each month.*

College Students

•In order to obtain a credit card, consumers under the age of 21 will need a co-signer or proof that they have independent means to repay the loan.*

•Consumers under 21 will have to opt-in for prescreened offers.*