Obama Set to Approve New Rules for Credit Cards
New Rules for Credit Cards to be Approved by Barack Obama
Obama government frames new rules for credit card companies that ensure some safety to consumers; for instance inadvertent or surprise charges, exceeding-the-limit fee and costs for paying bills through phone, will become part of the bill President Barack Obama proposes to sign into the law.
President Obama is earnestly waiting to sign the bill on Friday and the repair of bugs in credit card regulations should ease the economic slowdown.
The credit card and finance companies opposed the same; however, the bill cleared Congress with a huge support. These reforms not only protect customers but will set a rationale into the system as a whole.
The new credit card rules go into effect in 9 months, and as a part would prevent the credit card companies from giving away cards to people under age 21 with no means to pay the debts; at least they cannot give cards if a parent/ guardian will co-sign for the card.
According to this bill, a customer will have to be 60 days (or more) behind on a payment before he sees a rate increase on the existing balance. Even so the credit lender will need to restore the lower rate (that is existent previously) should the customer pay minimum balance on time for 6 months period.
Additionally, the customers have to receive a 45-days notice as well as the reason before the interest rates on them is increased.
According to Nilson’s Report during 2008 an estimated 700 million credit cards were floating in US; implying every person (woman and child included) was holding more than two cards. Currently millions of cardholders have huge balances and the Federal Reserve the nation’s debt is weighing around $2.5 trillions and this is excluding the home loans.
People of United States will keep fingers crossed and wait for the consequences of new bill.
