Another day, another mailing chock full of fine print from your credit card company. But, as lenders prepare for the Credit Card Reform Act to take effect on February 22, they're making lots of changes to their terms of service. But, if you always pay your credit card bill on time, then take a deep breath. These changes won't really affect you. But if you do have credit card debt, grab your change of agreement mailing and read closely.
Changes, Fees, and Threats to Your Privacy.
The Credit Card Reform Act has a lot of consumer protections, which is great. But that means a loss of profits for card issuers, so they're looking for new ways to make some dough. Many of them are making big changes while they still can.
Starting in February, card issuers will be required to provide the full text of all agreements on their websites. But, according to Bruce McClary of ClearPoint Credit Counseling Solutions, you might not have an easy time finding your agreements online before then. (Capital One, for example, doesn't post them online.) If you accidentally trashed your agreement notice and can't find it again online, call your credit card's customer service department for more information.
Once you have the statement, here are the tricks to look for and where to spot them in the fine print:
Also, look for other changes that just don't seem right, particularly as they relate to your grace period (under Paying Interest), balance transfer fees (under Transaction Fees), and closed account fees (under Fees).
For definitions of common terms on credit card agreements, click here.
What You Can Do.
If you don't like what you see, opt out before the new terms go into effect. The new law will ensure that cardholders have 45 days to opt out before rate changes go into effect. Still, opting out amounts to closing your card, which may have an adverse effect on your credit score (we recommend against closing your oldest card). If you don't understand something in the mailing, call your credit card issuer. As always, the best defense against rate changes is to simply pay your bill on time!