Credit card customers are all set to benefit from the string of new rules that have been introduced in the industry; these newly structured rules will also help reduce the exploitation by card issuers and also lead to credit card holders being better informed. The introduction of these rules are primarily aimed at making credit card charges far more transparent, thus requiring credit card issuers to treat their customers fairer. One of the biggest changes being introduced is the regulation mandating credit card issuers to follow the positive order of repayment, which means that any money being repaid by the card holder goes towards the most expensive debt on the credit card. This means if a customer has a balance transfer debt, with 0% interest and a purchase debt with 15% interest, the repayment made by the customer will go towards reducing the purchase debt rather than the balance transfer.
Another change that is quite welcome is that card issuers cannot raise the interest rates inadvertently. They will have to provide 60 days notice to the card holders who have the right to reject the hike in interest rate. In that scenario the card holder will be expected to pay off all the credit card debt until then in instalments at the previous rate without making any new purchases on the credit card. These new rules provide a lot more control to credit card holders over the way they are charged interests, and various other fees by credit card issuers. On the other hand, these new changes could cost credit card issuers millions of dollars in terms of the revenues. This also leads to the concern that credit card issuers might come up with their own ways within the rule of law to recoup some of their losses.
Credit card holders might not get ripped off by card issuers any more without their knowledge. But the new rules could cause an increase in various types of credit card fees for the customers, even as the card holders try to make up for their losses due to the new regulations. Therefore credit card customers are requested to be even more careful while borrowing on credit cards, or even while applying for new lines of credit card. Reading the fine print and being sure of the terms that are being offered on the credit card is highly imperative.