For years consumers have complained about some underhanded tactics used by credit card companies which make it almost impossible to pay off high debt balances. Prior to the enactment of The Credit Card Accountability, Responsibility and Disclosure (CARD) Act of 2009, credit card companies operated in a largely unregulated industry. In addition to the changes that have already taken place in 2009, today more regulations will go in place to help protect consumers from one-sided practices that favor the credit card companies. Although these changes are designed to aid consumers, it is still the credit card holders responsibility to understand how these changes affect their accounts. Here are a few reminders how your credit card account is changing to ensure you get the most benefit from new regulations.

  • Rate increases prohibited- Credit card companies are no longer allowed to increase your interest rate within the first year of opening an account. Consumers who already have an existing balance will also be protected from rate increases on the current balance. It is important to note that credit card issuers can raise your interest rate if it is part of an introductory offer that expires or if you are 60 days late paying your bill. Anyone with a variable indexed interest rate may also see changes in their interest rate. Credit card companies are required to give 45 days notice for interest rate changes that occur under normal circumstances.
  • Universal default- In the past, your credit card company reserved the right to increase your interest rate if you were delinquent on other bills, even if you were current with the credit card account in question. That is no longer allowed.
  • Over-the-limit restrictions- Over-the-limit fees are a big problem for many consumers, especially those who were unaware a purchase would put them over-the-limit. Under new regulations, credit card issuers must get approval from the card holder in order to honor over-the-limit transactions. Without this approval your transaction will be denied if it puts your account over-the-limit, therefore eliminating over-the-limit fees.
  • Co-signer needed for individuals under 21 years of age- If you are under 21 years of age, you will be required to have a co-signer before a credit card can be issued in your name. If you are able to provide proof of your ability to meet payments you might be able to open an account without a co-signer. This restriction will make it more difficult for college students and others under 21 to rack up high debt balances which they cannot reasonably repay.

These changes are designed to make it easier for credit card holders to manage their account . It is still, however the responsibility of each consumer to understand the terms and conditions on individual accounts. Managing your credit responsibly is very important to avoid high interest debt that can make it impossible to reach other financial goals.