Tuesday AM September 23rd, 2009
by: Ed Mayberry, September 23, 2009 8:09:00 am
The Credit Card Act of 2009 changes some ways that card issuers can function, as Jon Mulkin with Compass Bank explains.
"The most significant ones would include limited interest rate hikes. They also are going to have to give fairly significant notice — 45 days — in advance of any change in terms. Another significant change is no more universal default, and that is where card issuers in the past have raised consumers' interest rates if they may have defaulted or been late on making payments to other creditors."
The act also raises the age requirements for credit cards, requiring a co-signer for anyone under the age of 21. Mulkin says some credit card companies have been raising interest rates and changing agreements in anticipation of the new regulations.
"You know, it's probably not been something that Congress expected to have happened. But in fact, it has happened, and most issuers that we've seen have raised their interest rates or done a change in terms on their credit cards. They've — in some cases — added some additional fees. We at BBVA Compass, however, have not taken that action, and in fact we have made no change in our terms or in the interest rates on our current cards. And we're one of the few that has not done that."
Mulkin advises watching for interest rate hikes and changes in terms in the months before the changes take effect. Ed Mayberry, KUHF-Houston Public Radio News.