08/18/2009 - The first phase of the landmark credit card legislation signed by President Obama in May will take effect this week, forcing card issuers to give consumers more time to pay their bills and to consider interest rate increases.
Starting Thursday, issuers must give customers 45 days' notice before raising their interest rates, instead of 15 days as previously required. Customers can then choose to pay what they owe at the original rate over time but will not be able to use the card for future purchases.
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Even with the implementation of the first phase of the law, consumer advocates warned that card companies will continue to raise rates, cut credit limits, scale back reward programs and close down inactive accounts, as they have been doing in recent months.
In a Pew report to be released next month, researchers reviewed the lowest advertised rates of nearly 400 credit cards and found that they rose two percentage points, a 20 percent increase, since December. At the same time, the target funds rate at which banks lend to each other fell by 0.75 points to nearly zero.
Read the full article Credit Card Firms Face New Curbs This Week on the Washington Post's Web site.
Pew is no longer active in this line of work, but for more information visit the Safe Credit Cards Project on PewHealth.org.