SEVIER COUNTY, TN – According to Dr. Dena Wise, UT Extension Specialist, consumers planning to use credit cards for holiday purchases should be careful. Some credit card companies may be charging additional interest and fees over the holidays. These additional charges take advantage of the final few months before the new federal regulations on credit cards go into effect at the end of February, 2010.

The Credit Card Accountability, Responsibility and Disclosure (CARD) act, signed into law by the President in May 2009, was the most significant piece of credit protection legislation for consumers since the 1960s. Provisions related to 45-day prior notice of interest rate increases went into effect in September 2009. Most provisions, however, will not go into effect until February 22, 2010.  These are just a few of the new regulations:
·         If a penalty rate increase is accessed because of a late payment, the interest rate must be
returned to the previous rate after the cardholder’s payments are current for 6 months.
·         After a cardholder gets a new card, the interest rate cannot increase for a year. In the
case of a promotional rate, the promotional rate must be in effect at least 6 months.
·         The cardholder must be notified at least 45 days in advance of significant changes in
credit card terms.
·         Under the new legislation, billings will have to be mailed at least 21 days before they are
due, and payment received by 5 P.M. on the due date must be credited to that day’s payment. Late payment deadlines and postmark dates are also required to be clearly shown on the statement.
·         Credit card statements must also clearly show how long it would take to pay off a
credit card balance if cardholder makes only the minimum payment each month. Statements must also show the total cost in interest and principal payments if a cardholder makes only the minimum payment each month.
·         Young people under the age of 21 must have an adult co-signer or show proof of
adequate  income for repayment before they can be issued a card. Credit card companies will not
be able to make “pre-approval” offers of credit cards to young people under the age of 21 unless they specifically opt-in for offers.
·         Young people requiring co-signers will be required to receive permission from parents
or guardians in order to increase credit limit on joint accounts they hold with those adults.
As always, the best plan is to charge only what you can pay for at the end of the month, and pay your credit card bill in full well before its due date.
Submitted by:  Linda Hyder, UT Extension – Sevier County, 453-3695, lhyder@utk.edu