Some had advocated capping credit card interest rates at 15 percent--that didn't pass, and the bill also includes an amendment from Sen. Tom Coburn (R-OK) to allow guns in national parks. But the bill is chock full of restrictions on card companes, so here's a list of changes we'll see with the credit cards, if the bill passes and is signed:
-mandatory 12-point font for applications and disclosures
-no rate increases in the first year of holding a card (barring exceptions like expiration of promotional rates, min. payment not received within a 30-day grace period, failure to comply with a workout plan)
-no retroactive rate increases on existing balances (barring exceptions)
-45 days of notice before rate increases, and the chance for customers to opt out of the new agreement
-promotional rates last at least 6 months
-no fees on balances comprised only of interest accrued from previous cycle; failure to pay such a balance won't put card into default (though cardholder is still obligated to pay)
-no finance charges on balances from previous billing cycle
-payments exceeding minimum go to pay off debt with highest interest rate (if more than one rate applies to different parts of the debt on one card)
-no credit cards unless you're 18 (or emancipated)
-only one credit card per college student (unless you have a verifiable annual income and the credit limits add up to less than 30 percent of that income)
-college student credit limits capped at $500 or 20 percent of the student's annual income, unless a parent, guardian, or spouse assumes joint responsibility of the card
-no fee for paying over the phone or online (unless you pay on the date it's due or the day before)
-no over-the-limit fees unless cardholder has chosen to allow credit card company to process over-the-limit transactions (the alternative being transactions get denied)
-only one over-the-limit fee per billing cycle
-agreements and contracts posted online (except individually negotiated ones)
-signs on stores offering store credit cards
-solicitations include warning that multiple credit inquiries (required to get a card) can lower your credit score
-new regulations from the Fed on credit reporting on active-duty military and veterans who opened credit cards less than two years prior to service
-disclosure that paying only the minimum will increase interest rates and make it take longer to pay off the card
-information provided to cardholder once a year on the time it would take to pay off the card making only minimum payments; the total cost of paying it off; and the monthly payment that would be required to pay off a card in 12 months, 24 months, and 36 months
-one free credit report per year provided in a language other than English to non-English-speakers (credit reporting agencies are already required to give one free per year in English)
This article available online at:
http://www.theatlantic.com/politics/archive/2009/05/what-will-change-about-credit-cards/17864/
