Los Angeles Credit Card : New Regulations

By: EconomyWatch Content Team   Date: 26 January 2010

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Recently, information was published in the Los Angeles Times regarding rates for a Los Angeles credit card.  The focus of the article was on the growing number of changes for credit regulation along with continuing problems of today’s economy.  In recent years, consumers have seen many interest rate hikes, changes in credit card fees, lower credit limits, and other modifications specific to a Los Angeles credit card.

Experts agree that while things have been hard throughout 2008 and 2009, that 2010 is going to force people with a Los Angeles credit card to be even more accountable.  In addition, credit card companies, banks, and credit unions that issue credit cards will also need to be more responsible and be accountable to consumers.  Because of this, anyone with a Los Angeles credit union needs to respect credit more than ever before and do everything possible to avoid over-charging and always pay balances off in full each month.

Probably the greatest change we have seen is the CARD Act, which was passed by Congress this past May.  This CARD Act stands for “Credit Card Accountability, Responsibility, and Disclosure Act of 2009”, which now requires that consumers be provided with a 45-day notice from credit card companies, banks, and credit unions before interest rates increase.  Additionally, under this new law, consumers are to be sent their Los Angeles credit card statement 21 days prior to the payment being due.

Obviously, an Act such as this will have a direct impact on every type of Los Angeles credit card but also the issuing company or financial institution.  Therefore, the government has allowed time for adjustment.  Dates for the Act to become final started with the first in August of 2009, the second date one will be in February of 2010, and the third date will be in August 2010.  By that time, everyone that issues a Los Angeles credit card will have everything in order to comply with this new regulation.

In August of 2009, the change that consumers saw was the 45-day notice of interest rate changes and the new 21-day billing cycle.  The purpose of these two changes was to provide cardholders with enough time to get the Los Angeles credit card paid but without being charged outrageous fees or a higher interest rate.  Along with this, an opt-out for a rate hike can be chosen by the consumer, which means when an individual refuses a higher rate, the bank or credit union is permitted by law to close out the account, as well as increase the monthly payment by 50% until paid in full.

However, the changes coming this year for a Los Angeles credit card or any state are going to be the most impacting.  For instance, starting February 22, if a cardholder has consistently made credit card payments on time, there would be no increase of interest for outstanding balances.  With this, if the issuing company or financial institution increased rates, only new credit card charges would be charged the higher rate.

Other changes will go into effect as of August 2010 for Los Angeles credit cards.  For instance, consumers will be advised the length it would take to pay off the balance if only a minimum payment were being made and credit cards will not be issued to people under the age of 21 without a co-signer or proof of income for making payments.  Additionally, Los Angeles credit cards for people with bad credit may waive initial fees to secure the card and if they do, it would be lower than current charges.


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