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What You Need to Know: New Credit Card Rules
Effective February 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 beginning on February 22, 2010.
What your credit card company has to tell you
When they plan to increase your rate or other fees. Your credit card
company must send you a notice 45 days before they can
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increase your interest rate;
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change certain fees (such as annual fees, cash advance fees, and late fees) that apply to your account; or
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make other significant changes to the terms of your card.
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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, subject to certain limitations.
For example, they can require you to pay the balance off in five years, or they can double the percentage of your balance used
to calculate your minimum payment (which will result in faster repayment than under the terms of your account).
The company does not have to send you a 45-day advance notice if
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you have a variable interest rate tied to an index; if the index goes up, the company does not have to provide notice before your rate goes up;
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your introductory rate expires and reverts to the previously disclosed "go-to" rate;
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your rate increases because you are in a workout agreement and you haven’t made your payments as agreed.
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increase your interest rate;
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change certain fees (such as annual fees, cash advance fees, and late fees) that apply to your account; or
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make other significant changes to the terms of your card.
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How long it will take to pay off your balance. Your monthly credit card bill will include information on how
long it will take you to pay off your balance if you only make minimum payments. It will also tell you how much you would need to pay each month in order
to pay off your balance in three years. For example, suppose you owe $3,000 and your interest rate is 14.4%--your bill might look like this:
New Balance $3,000.00
Minimum payment due $90.00
Payment due date 4/20/12
Late Payment Warning: If we do not receive your minimum payment
by the date listed above, you may have to pay a $35 late fee and your
APRs may be increased up to the Penalty APR of 28.99%
Minimum Payment Warning: If you make only the minimum payment
each period, you will pay more in interest and it will take you longer
to pay off your balance. For example:
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If you make no additional charges using this card and each month you pay... |
You will pay off the balance shown on this statemnet in about... |
And you will end up paying an estimated total of... |
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Only the minimum payment |
11 Years |
$4,745 |
No interest rate increases for the first year. Your credit card company cannot increase your rate for the first 12 months after you open an
account. There are some exceptions:
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If your card has a variable interest rate tied to an index; your rate can go up whenever the index goes up.
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If there is an introductory rate, it must be in place for at least 6 months; after that your rate can revert to the "go-to" rate the company
disclosed when you got the card.
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If you are more than 60 days late in paying your bill, your rate can go up.
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If you are in a workout agreement and you don't make your payments as agreed, your rate can go up.
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Increased rates apply only to new charges. If your credit card company does raise your interest rate after the first year, the new rate
will apply only to new charges you make. If you have a balance, your old interest rate will apply to that balance.
Restrictions on over-the-limit transactions. You must tell your credit card company that you want it to allow transactions that will take you
over your credit limit. Otherwise, if a transaction would take you over your limit, it may be turned down. If you do not opt-in to over-the-limit
transactions and your credit card company allows one to go through, it cannot charge you an over-the-limit fee.
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If you opt-in to allowing transactions that take you over your credit limit, your credit card company can impose only one fee per billing cycle.
You can revoke your opt-in at any time.
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Caps on high-fee cards. If your credit card company requires you to pay fees (such as an annual fee or application fee), those fees cannot total more
than 25% of the initial credit limit. For example, if your initial credit limit is $500, the fees for the first year cannot be more than $125. This
limit does not apply to penalty fees, such as penalties for late payments.
Protections for underage consumers. If you are under 21, you will need to show that you are able to make payments, or you will need a cosigner, in
order to open a credit card account.
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If you are under age 21 and have a card with a cosigner and want an increase in the credit limit, your cosigner must agree in writing to the increase.
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Changes to billing and payments
Standard payment dates and times. Your credit card company must mail or deliver your credit card bill at least 21 days before your payment is due. In addition
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Your due date should be the same date each month (for example, your payment is always due on the 15th or always due on the last day of the month).
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The payment cut-off time cannot be earlier than 5 p.m. on the due date.
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If your payment due date is on a weekend or holiday (when the company does not process payments), you will have until the following business day to pay. (For example, if
the due date is Sunday the 15th, your payment will be on time if it is received by Monday the 16th before 5 p.m.).
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Payments directed to highest interest balances first. If you make more than the minimum payment on your credit card bill, your credit card company must apply the excess
amount to the balance with the highest interest rate. There is an exception:
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If you made a purchase under a deferred interest plan (for example, "no interest if paid in full by March, 2012"), the credit card company may let you choose to apply
extra amounts to the deferred interest balance before other balances. Otherwise, for two billing cycles prior to the end of the deferred interest period, the credit card
company must apply your entire payment to the deferred interest-rate balance first.
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No two-cycle (double-cycle) billing. Credit card companies can only impose interest charges on balances in the current billing cycle.
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FDIC Extends Temporary Increase in Standard Maximum Deposit Insurance Amount
Effective May 20, 2009
The Federal Deposit Insurance Corporation (FDIC) is an independent agency of the United States government that protects the funds depositors place in FDIC-insured institutions. FDIC deposit insurance is backed by the full faith and credit of the United States government. Since the FDIC was established in 1933, no depositor has ever lost a single penny of FDIC-insured funds.
There is no need for depositors to apply for FDIC insurance or even to request it; coverage is automatic. FDIC insurance covers funds in deposit accounts, including checking and savings accounts, money market deposit accounts and certificates of deposit. FDIC insurance does not cover other financial products that insured banks may offer such as stocks, bonds, mutual fund shares, life insurance policies, annuities or municipal securities.
The standard insurance amount currently is $250,000 per depositor. The $250,000 limit is permanent for certain retirement accounts, which includes IRAs. The $250,000 limit is temporary for all other deposit accounts through December 31, 2013. On January 1, 2014, the standard insurance amount will return to $100,000 per depositor for all account categories except certain retirement accounts, which will remain at $250,000 per depositor.
To ensure funds are fully protected, depositors should understand their coverage limits. The FDIC provides separate coverage for deposits held in different account ownership categories. The coverage limits shown in the chart below refer to the total of all deposits that an accountholder has in the same ownership categories at each FDIC-insured institution. The chart below assumes that all FDIC requirements are met. (For details on the requirements, go to www.fdic.gov/deposit/deposits.)
FDIC Deposit Insurance Coverage Limits (Through December 31, 2013)* |
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Single Accounts (owned by one person) - $250,000 per owner
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Joint Accounts (two or more persons) - $250,000 per co-owner
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IRAs and other Certain Retirement Accounts - $250,000 per owner
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Revocable Trust Accounts - $250,000 per owner per beneficiary up to 5 beneficiaries (more coverage is available with 6 or more
beneficiaries subject to specific limitations and requirements)
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Corporation, Partnership and Unincorporated Association Accounts - $250,000 per corporation, partnership or unincorporated association
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Irrevocable Trust Accounts - $250,000 for the non-contingent, ascertainable interest of each beneficiary
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Employee Benefit Plan Accounts - $250,000 for the non-contingent, ascertainable interest of each plan participant
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Government Accounts - $250,000 per official custodian
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You can calculate your insurance coverage using the FDIC's Electronic Deposit Insurance Estimator at www.myFDICinsurance.gov. For questions about FDIC coverage, call toll-free 1-877-ASK-FDIC or ask a representative at your bank.
* Unlimited deposit insurance coverage for noninterest-bearing transaction accounts (as defined in 12 C.F.R Part 370) at institutions
participating in the FDIC's Transaction Account Guarantee Program is available through June 30, 2010. The extension of the temporary
standard insurance amount of $250,000 through 2013 does not apply to the Transaction Account Guarantee Program.
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