Next week offers the long-awaited red letter day for consumers frustrated by unexpected interest fee spikes, varying penalties, and moveable Whack-A-Mole due dates on their credit card billing statements. Next Monday, the Credit Card Reform Act of 2009 finally takes effect, forcing some consistency on an industry long known for its inconsistencies.

Ten for ‘10

Consumer Reports.org outlined ten critical changes we can now expect on our billing statements and any future credit accounts:

1. Interest rates can’t be raised during the first year of an account;

2. Customers will be notified 45 days in advance of any change in interest rates;

3. Bills can be paid online or over the phone without incurring a processing fee;

4. Customers must be over 60 days late on payments before their interest rate can be raised on balances. if the rate is raised, it will go back to the lower rate if customers make the minimum payment on time for six months in a row;

5. Over-the-limit fees can’t be charged unless cardholders are told that the purchase will put them over their limit and they authorize it to go through anyway;

6. If your card has more than one interest rate on balances, then payments must be applied to the highest interest rate first;

7. Gift cards can’t expire for five years, and issuers can’t charge dormancy fees for unused amounts left on the card;

8. Credit card statements must be mailed out 21 days before they’re due;

9. Individuals under 21 will need a co-signer on their cards unless they can prove that they have the means to make payments on their own;

10. Credit card agreements will have to be posted on the internet.

Many would agree that these are quite reasonable requirements. Unfortunately, industry lobbyists thought otherwise, fighting tooth and nail to sink the bill. When their efforts failed, the credit card companies got busy, FAST. Rates and fees were increased, credit limits were cut, and interest terms were changed from fixed to variable in an attempt to make hay while the sun was still shining. A number of people have already received the, “Accept this rate increase or we will close your account in 30 days,” letter.

And while a consumer-friendly, February 22 is only a few days away, there are still some favorable credit card company loopholes to keep in mind. At this time, there is still no regulation on how high an interest rate can reach on limits or future purchases, nor have small business credit line woes been addressed. Readers, what do you think? Will this reform work or will we just keep getting hit with more inventive fee structures?

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