Changes in Credit Card Law

Here's a law that will help a lot of consumers get out from under their credit card debt. Sometimes people have found that their credit card interest rates were suddenly raised to a level where paying off the debt was all but impossible.

The new Credit Card Accountability and Disclosure Act of 2009 becomes effective in several stages, and some new rules became effective yesterday (Thursday the 20th).

Now, credit card companies have to warn consumers 45 days before an increase rate increase. In case of a rate increase, customers may choose to close the account and pay off the balance at the old (lower) interest rate. In the past, credit card companies only had to give 15 days notice that the interest rate was being raised.

In addition, the credit card companies have to mail statements at least 21 days before the payment is due. That time period used to be 14 days.

There will be additional provisions of the act that become effective in the future, including restrictions on marketing credit cards to young people and regulations over fees and rate increases.

The most important part of a plan to reduce credit card debt is including strategies (like cutting them up, or maintaining an emergency fund) so you don't grow a balance again. A quote from Orison Swett Marden: "Unfortunately, Congress can pass no law that will remedy the vice of living beyond one's means."