08.19.09
By John Ulzheimer
In what I've described as the "sneak previews" to the main event, two provisions of the
CARD Act become enforceable August 20. These provisions are both specific to amounts of time consumers have to pay their bills and expect notice of changes to their credit card accounts. These changes are as follows:
1. At least a 21-day grace period – Beginning on August 20, credit card issuers must mail your bill (or your statement) at least 21 days before it is due. This changes a 14-day requirement as of right now. The upside to cardholders is that this change essentially gives all of us an extra week to pay our bills. Many lenders have already adopted the 21-day grace period, which is reflected in your credit card statements. Cardholders who use automatic payments should adjust their schedule by no more than one or two days to optimize your cash flow. The point is to use the additional 7 days as a safety net and not as an opportunity to continue to cut close your minimum payments. People who are late after this provisions takes effect simply aren’t paying attention to their due dates.
2. 45-day advance notice of interest rate increases – Also beginning on August 20, credit card issuers will be required to give at least a 45-day notice about interest rate increases (as opposed to the current 15-day advance notice requirement). I’ve gone on record as calling this provision a “waste of ink”, as it doesn’t do anything to increase the likelihood that cardholder will actually read their notices. Consumers who didn’t read their notices when they were sent 15 days in advance still won’t read them with 45 days of notice. The additional 30 days supposedly gives consumers additional time to not only plead their case to their credit card issuers – a largely unsuccessful practice – but also allows them to move balances to other
credit cards that have not increased their rates.
Again, these are the less relevant changes with respect to consumer protections. The more critical protections go into effect in February 2010, with a few final changes coming in July 2010.
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