RICHMOND, VA (WWBT) - There are some big changes coming that affect your credit and your relationship with credit card companies. New rules go into effect Monday.
The Credit Card Act of 2009 has promised to level the playing field between consumers and credit card companies. One big change is the ability to eliminate over limit transaction fees.
"You can let credit card company know that you do not want them to process over limit transactions, which will prevent them from ever charging you an over limit fee. That can save consumers thousands of dollars," said Bruce McClary, Clearpoint Financial Solutions.
The new law hopes to end confusing billing practices with a new set of rules that are easier to understand.
"There is going to be a box on your credit card statement that tells you a few things," he said. "First of all it will tell you how much interest you've paid during the current year. It'll also tell you how much your payment needs to be in order to pay off your balance in 36 months."
McClary says customers can expect more protection against sudden interest rate hikes and penalty fees.
"Interest rate increases because of late payments can only take effect after two consecutive payments are missed," he said.
Also, credit card companies won't be allowed to charge interest on their penalty fees anymore.
"Consumers stand to save hundreds and thousands of dollars on this by not having those fees hit them," he said.
Notorious tricks like universal default and double-cycle billing will also be eliminated.
"No more double cycle billing it's gonna save some consumers a lot of headache and money," McClary said.
The new laws also spells out how credit card companies can apply your payments.
"Makes them apply any additional payment to the balance with the higher interest rate, to help you pay off faster," he said.
McClary says the best way to maximize your savings with the new law is to be informed and communicate with your creditors.