Educate Yourself: Approaching Changes in Student Credit Cards
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by: barrywaters
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Starting on August 20, 2009, owners of student credit cards will have new control over their credit cards, and new federal controls over what credit card issuers can and cannot do, thanks to the Credit CARD Act of 2009. The legislation takes effect in several stages, with the biggest changes coming on February 22, 2010 and the last provisions taking effect on May 22, 2011. However, the very first provisions will start giving credit card owners relief on August 20th.
On August 20, these changes take effect:
* Credit card companies are required to give 45 days warning before changing the terms of consumers credit card agreements. The old limit was 15 days warning, a term that was so short that consumers often didnt receive the letter warning them of oncoming changes until the date of the change had arrived. This change will let you know in advance whats happening with your student credit cards, instead of letting companies surprise you with belated announcements in your mailbox.
* Credit card companies must mail monthly statements to customers at least 21 days before the account is due. This change puts an end to an old trick unethical companies liked to play: sending out monthly statements so late that customers couldnt pay on time, leading to late fees, raised interest rates, and other sources of "free" money for the credit card company. The change also gives you more time to budget for your student credit card bills, lessening the chance that you will pay late.
* Consumers will be able to opt out of fee hikes and interest rate increases at their discretion. If they refuse the credt card companys proposed fee or rate hikes, their account is closed, but they may pay off the remaining balance under the more favorable terms they had beforehand. For instance, if your card issuer wants to hike your interest rate from 10% to 14% and your late fees from $35 to $50, you can refuse. Your account will be closed, and you will pay off whatever balance is left in your account at the 10%rate, with $35 late fees if you slip up. This provision of the Credit CARD Act turns what used to be a privilege offered at the credit card companies discretion into a consumer right.
Big changes! And even bigger ones are following in their wake. But take care: Credit card issuers are rushing to amend their terms before the Credit CARD Act of 2009 changes the rules. Consumers are reporting waves of interest rate and fee hikes and sudden card cancellations. So keep a close eye on your mailbox. In the next year, the credit industry is going to be overhauled for the better, and your student credit cards are going to become even safer than before. Topics of interest Secured credit cards | Credit cards | Student credit cards | Credit card applications | Low interest credit cards |
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Research on credit card applications, visit www.getsmart.com/credit-cards.
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