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Feds Overhaul Credit Card Rules

New rules will tighten interest rates, could cost issuers $10B in revenue

By Ambreen Ali,  Newser User

Posted Dec 18, 2008 11:53 AM CST

(Newser) – Credit card companies will be forbidden from raising interest rates on existing debt after major changes to federal regulations OK'd today go into effect, USA Today reports. Starting in July 2010, the new rules will also restrict issuers' ability to cherry-pick higher-interest parts of balances to pay down first, and mandate a 45-day notice of account changes.

Banks, which say they stand to lose $10 billion annually under the new rules, warn that tighter, costlier credit will result.The Treasury finalized the rules this morning after reviewing a record 65,000 public comments; the Fed is expected to sign off today. The announcement comes as loan delinquencies swell.

New rules will prevent companies from raising interest rates on existing balances.
New rules will prevent companies from raising interest rates on existing balances.   (AP Photo)
Americans used nearly 700 million credit cards last year.
Americans used nearly 700 million credit cards last year.   (AP Photo)
The new rules will enhance public confidence and level the playing field in the credit card industry, a federal official says.
The new rules will enhance public confidence and level the playing field in the credit card industry, a federal official says.   (Getty Images)
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COMMENTS
Showing 1 of 1 comment
Guest
Dec 18, 2008 1:07 AM CST
Make sure you call your Credit Card company if they raise your rate before this takes effect. They probably will not lower it from the current rate but I have experienced they will reduce it from some large arbritary change. Be sure you are a good payer and have a nice tone to your voice when calling. Good luck, 'jake_NM

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