Page 32 - Book6E

24
Plastic Money
new balances. The interest on the old balance must be assessed at the old rate. Also, a credit card company cannot raise interest rates for 12 months. This new requirement for charging additional interest gives reason for the credit counselor to offer more encouragement to the consumer to pay off credit card debt, and that between the consumer and his credit counselor, more control over credit card debt can be realized.
Unfair late fee practices . The Act frees the consumer from late fee traps which are incurred with weekend and holiday deadlines and due dates that change periodically. Often times a consumer will not compare a previous statement with a present one and therefore doesn't realize he has been charged a late fee for passed due dates. He also does not take into account the mailing time if the due date falls on a weekend or holiday. This has been a significant way for credit card companies to increase their revenue—to merely make the due date on a weekend or holiday. Following the guidelines of the Act, should the due date fall on a holiday or weekend, the credit card company will be in clear violation.
Credit limit increases without consumer knowledge . Most credit card companies have allowed consumers to go over their credit limit without any communication required between the consumer and the company. Credit card companies have made a tremendous amount of money due to this allowance. The credit card company would then slap on an extra fee, typically at least $39. As a result of the Act, a credit card company will have to get permission from the consumer to pro- cess those transactions that would put the consumer's account over the credit limit. If a credit card company pays charges that have exceeded a consumer's credit limit, it cannot charge an over-the-limit fee. Under the Act, extra fees are greatly restricted for a consumer who has a credit card with a low credit limit, largely because that consumer does not qualify for a card with a higher credit limit.