Credit Cards with No Transfer Balance Fees

The Credit Card Accountability Responsibility & Disclosure Act of 2009, or CARD Act, was signed into law by President Barack Obama in May 2009, but takes effect Feb. 22, 2010.The Federal Reserve’s new rules for credit card companies mean new credit card protections for you. Here are some key changes you should expect from your credit card company.

1. No more confusing billing practices

Credit card payments will be due at the same time each month, with notification of the bill made at least 21 days in advance of its due date. Payments will be applied to highest interest-rate balances first so that customers can pay off their balances faster and more cheaply. Finally, credit card companies will be obligated to use “plain language in plain sight” on all materials related to the account and periodically display on statements how long it would take consumers to pay off their existing balance and interest charges if they paid only the minimum due. The law limits when credit card interest rates can be increased on existing balances and allows consumers whose interest rates have been increased to reduce their annual percentage rates (APRs) to previous levels if they’ve been good and paid their bills on time for six months.

2. Interest-rate reform

Nearly all interest-rate increases on outstanding balances will be prohibited and card companies must notify the consumer 45 days in advance of an interest-rate increase. Additionally, there cannot be any interest rate increases for the first year any account is open. When they plan to increase your rate or other fees. Your credit card company must send you a notice 45 days before they can:

• increase your interest rate;
• change certain fees (such as annual fees, cash advance fees, and late fees) that apply to your account; or
• make other significant changes to the terms of your card.

The company does not have to send you a 45-day advance notice if:

• you have a variable rate tied to an index; if the index goes up, the company does not have to provide notice before your rate goes up;
• your introductory rate expires and reverts to the previously disclosed “go-to” rate;
• your rate increases because you are in a workout agreement and you haven’t made your payments as agreed.

3. Opting-in for overdraft and new regulations

Customers will now have to opt-in to an overdraft program instead of being automatically enrolled. This means that if cardholders try to make a purchase that exceeds their limit or overdraws a debit account, their card will simply be declined. Under the old rules, the transaction could go through and the consumer would be fined. If your credit card company is going to make changes to the terms of your card, it must give you the option to cancel the card before certain fee increases take effect. If you take that option, however, your credit card company may close your account and increase your monthly payment.

4. Protections for young consumers

Credit-card companies face greater restrictions on marketing cards to college students. More generally, those under 21 will have to prove that they have the means to pay off their card limits or have a cosigner (parent) before they can be granted a card.

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