The Federal Reserve Board is currently taking opinions on the proposed changes to the credit card rules until Aug 4th. Below is a summary as well as a link to the proposal on the website.
Links:
- <http://federalreserve.gov/consumerinfo/default.htm>
- <http://federalreserve.gov/newsevents/press/bcreg/20080502a.htm> Proposed C/C and Overdraft Services. Scroll to the bottom to comment on this proposal.
Summary:
- Banks would be prohibited from increasing the rate on a pre-existing credit card balance (except under limited circumstances) and must allow the consumer to pay off that balance over a reasonable period of time.
- Banks would be prohibited from applying payments in excess of the minimum in a manner that maximizes interest charges.
- Banks would be required to give consumers the full benefit of discounted promotional rates on credit cards by applying payments in excess of the minimum to any higher-rate balances first, and by providing a grace period for purchases where the consumer is otherwise eligible.
- Banks would be prohibited from imposing interest charges using the “two-cycle” method, which computes interest on balances on days in billing cycles preceding the most recent billing cycle.
- Banks would be required to provide consumers a reasonable amount of time to make payments.
