Yeah, this is slightly old news - at least a few months old; however, I just received a notice from my issuing bank.

Does anyone have any interesting views or thoughts on the new credit card rules that are being put in place by the Obama Administration? I received a notification from my credit card issuing bank about the new rules and, from my reading, the new rules seemed targeted toward consumer protection. However, these days I am always skeptical when the U.S. Government appears to do something for the people - I assume there must be a downside.

The reform law has a few interesting rules:

1. Starting on Aug 20, 2009 all card holders must be given 45 days advance notice of significant changes in card terms. (Commentary: I read "significant" as a big ass gray area)
2. One the same Aug 20, 2009 all banks must give card holders at least 21 days to pay their monthly credit card bill. (Commentary: the minimum was only 14 days prior to this law)
3. Starting on Feb 22, 2010 there is a ban for issuing banks to increase your interest rate because of universal default. "Universal Default" is the shady act of "Issuing Bank A" increasing your interest rate because you were late on a payment to "Issuing Bank B". More specifically: Universal default WAS a common practice among issuing banks that allowed them to increase your interest rates for any change in risk profile with any lender. This meant that if you failed to make timely payments to other creditors -- such as other credit card issuers, utilities, car lenders, landlords or mortgage lenders -- the interest rate of your credit card could be increased, even if you were never late to pay that credit card.
4. Also starting sometime in 2010 there will be a ban on double-cycle billing. Double cycle billing is a shady calculation used by some issuing banks that allowed them to apply interest charges to two full cycles of card balances, rather than just the current months balance. Two-cycle billing eliminates the grace period for paying your card balance if you paid your balance in the previous month.
5. Starting on Aug 22, 2010 there will be provisions for restoring interest rates. These provisions are for the instances when a bank raises your interested rates due to late payment, etc. With the new provisions, there are some rules to restore the interest rate back to the original level on a card holders account after six months of good standing.

There are a few other minor changes.

Any thoughts? Want more info? Do you have anything to share with the class?

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