The Credit Card Fair Fee Act (HR5546/S 3086), which will put an end to credit card price-fixing and provide an open process to negotiate interchange fees by the credit card industry, is not happening fast enough for some credit card holders. The act will not take effect until July 2010, causing many credit companies to act now on getting their money. Chase Credit Card notified its customers in December that it was adding a $10 monthly fee and raising their minimum card payment from two percent to five percent beginning in January for some cardholders. These changes were mailed in the form of a notice, which many cardholders said they failed to read due to multiple reasons, one being the volume of mail they receive during the month of December. Whether it was intentional on Chase’s part to send these notices knowing consumers might be caught unaware during the Holiday season or not is up for debate. Either way, with the current economy, cardholders are running into problems paying the current minimum amount due on their statements.
Many Chase cardholders saw the minimum payment on their credit card bill double. When contacting Chase, and questioning the monthly balance due, they were confronted with the following options, pay the amount due, be “coerced” into paying a higher percentage rate with lower payments, or paying the entire amount on their remaining balance. With the high jobless rate and the dwindling economy, the option that most cardholders will have to choose is a ‘no-brainer’.
The Federal Reserve, the Office of Thrift Supervision, and the National Credit Union Association received over 60,000 complaints last year prompting them to issue regulations regarding raising credit card fees and interest rates.
Some of the specific new rules are:
-Ban on raising the interest rate on a current balance unless cardholder is more than 30 days late on a payment or are the holder of a variable rate card. However increases are allowed on future purchases with a 45-day advanced notice.
-Credit card issuers will not be able to raise rates on future purchases within the first year of a new account unless stated rates are revealed when the account is opened.
-Issuers must provide ample time for cardholders to pay their bill by mailing the statement at least 21 days before its due date, thus avoiding late fees.
-A 45-day notice will be enacted before a penalty rate can be applied.
-Stop maintenance fees to make up the issuers lost of interest revenue.
-Ban double cycle billing, which is the issuer charging interest on balances already paid.
NOTE: Chase said the increase would only affect one-half of one percent of their account holders.
Sources: Consumer Action, Unfair Credit Card Fees, Dallas News