The 2010 Credit Card Act: Who Won’t Be Affected?
Credit card companies are in the money business, meaning money (and lots of it) is their utmost concern. Of course, they do care about the consumers somewhat, offer certain protections. After all, the consumer is what makes up their bottom line. Still, concerns about consumers and fair practices are not always first and foremost on the minds of the credit card companies.
Since the last major reform 30 years ago, credit card companies have not always been fair, employing sneaky practices to increase their profits and make up for their losses. It is a risky game they play to begin with, and the consumer, who wants to keep their good name and their credit card, often has to just live with what the credit card company has done.
Changes in 2010
On July 1st, 2010, the FTC’s new Credit Card Act will go into effect. This is to ensure more fair practices and consumer protections. In the meantime, credit card companies have been employing their same old tactics at a more rapid speed, raising rates to protect themselves from loses and gear up for the coming changes. Consumers can look forward to new laws that protect against the practice of double-cycle billing, put new standards on how, when and why interest rates can be increased, put forth a set grace-period without penalties and even allocate payments toward higher interest debt first.
Not Everyone is Covered
This new credit card reform is a good thing for most consumers. However, there are some who will not have the benefit of being covered under the new laws. There are those who carry credit cards who are not considered consumers and others who are already protected under other laws. The current reform will only protect the average American credit card holder; the everyday consumer.
Businesses are also a Target
Commercial credit cards – those held buy all kinds of businesses – will not be covered under the new laws. These are not considered consumer credit cards. many businesses rely on credit cards to help with cash flow, expenses and accounting practices. Unfortunately, due to the lack of added protection under the new law, credit card companies could see this as an opportunity to gain back some of their losses. Business cardholders should brace themselves for a rate increase.
Military Returning from Deployment
Members of the military are covered under a law that demands their interest rates be set at 6% while they are deployed. When they return to American soil, their rates can then be returned to the original, often much higher amount. Currently, this is not one of the approved sets of credit card holders affected by the law. Perhaps it was an oversight, as a question about this subject baffled the Federal Reserve Attorney. The situation is being reviewed, and perhaps by the time the law goes into effect, military personnel will be covered as well.
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