Credit Card News
Advertising Disclosure
Credit-Land.com is an independent, advertising-supported web site. Credit-Land.com receives compensation from many credit card issuers whose offers appear on our site. Compensation from our advertising partners impacts how and where their products appear on our site, including, for example, the order in which they may appear within review lists. Credit-Land.com has not reviewed all available credit card offers in the marketplace.
Credit Card Applications » News » Other » New Fed Clarification gives Delinquent Credit Cardholders a 60 days notice

New Fed Clarification gives Delinquent Credit Cardholders a 60 days notice

By
Add to Favorites:
New Fed Clarification gives Delinquent Credit Cardholders a 60 days notice

It seems as if credit card issuers continue to look for loopholes to circumvent the Credit CARD Act of 2009. Not even two short years after the law originally passed, credit card companies are already taking the hit with a loss of revenues from the restrictions on when and if they can charge fees, increase interest rates and more. The latest issue to arise doesn’t have credit card issuers jumping through hoops, but it may provide an additional loophole for consumers. This time it is all about the promotional and introductory offers from credit card companies that seem to clog up your mailbox on a weekly basis.

Introductory Offers

More than likely, you have received one or more of these introductory credit offers at some point in your life. You may have even taken advantage of one or two of them. Introductory offers are those credit cards that say you can pay zero percent or a very low interest rate on credit card balance transfers and/or purchases for a set period of time. A good example can be the new introductory zero interest rate on balance transfer from Capital One® Platinum Prestige Credit Card. If you were to apply for this card today, you would have zero interest on your balance until June of 2012. Not only can an introductory rate help you save money on balance transfers, but now it may protect you from an interest rate increase too.

Late and Delinquent

When the new credit card laws went into effect, one of its policies became a regulation on when a credit card issuer can increase an interest rate. The law states that if a consumer is more than 60 days delinquent on the account, the credit card issuer has the right to raise the interest rate on the card. For new credit cardholders, however, the law protected them from rate increases for one year after establishing the card. For cards with introductory rates, the law states that the interest rate increase cannot occur until the introductory rate period expires. But, what if the consumer is delinquent on a credit card that is still in its introductory period? This question seemed to confuse both consumers and credit card issuers, but the confusion ended last week.

Interest Rate Increase

Now, the Federal Reserve has clarified when a credit card issuer has the right the raise an interest rate on a credit card account that has an introductory offer. As of March 18th, event if you’ve accepted a promotional credit card deal, a credit card issuer may still increase your interest if you become 60 days delinquent on your account.

Although, the passing of the CARD Act is supposed to protect consumers from interest rate increases and fee levies from the credit card issuer that are unexplained and unexpected, it is not construed to allow delinquencies. Since there seemed to be some confusion on how the new law applied to introductory offers where the account holders were delinquent, the Federal Reserve has now cleared that up with its latest clarification announcement on the interpretation of the law. That interpretation is simple – don’t be late on making your payments because at that point the law can not protect you and your rate will increase.

Add to Favorites:

Related News:

Discover Nabs Three Spots on Money Mag’s Best Credit Card List for Third Consecutive Year

By Elizabeth Nelson, Posted: September 27, 2016

The Discover it Card, Discover it Miles Card, and Discover it Secured Card were all listed among the best credit card products on the market by MONEY Magazine, which recently released its Best Credit Cards report for 2016-2017. Continue reading
Frugal Fashionistas Rejoice: Century 21 and Alliance Data Launch New Credit Card

By Elizabeth Nelson, Posted: September 26, 2016

New York City-based bargain department store Century 21 is partnering with Alliance Data to launch a new credit card program. A favorite of fashionable bargain-hunters, Century 21 operates 10 stores across the greater New York City area ... Continue reading
Talking About Money Equals Happiness

By Dar Dowling, Posted: September 23, 2016

Love and money are the two biggies in life and relationships, and now, according to a new study by TD Bank, couples who talk about money have a higher happiness factor than those that don't. Continue reading
Get the latest news, articles and expert advice delivered to your inbox. It's FREE.
Get 0% Intro APR on Balance Transfers and Purchases for 21 months. After that, the APR will be 12.24%-22.24% based upon your creditworthiness.
For Excellent/Good Credit
1% cash back on select purchases, terms apply
For Fair Credit
Guaranteed $500 Unsecured Credit Limit
For Bad Credit