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Early Credit Card Bill Amendment Activating Soon But It’s Not Exactly What You Want

If you’ve been an avid follower of the credit card bill, that popular set of legislation that was supposed to equalize the credit card industry for both credit card companies and credit card holders, then you probably know that within the next few weeks, one provision of the credit card bill is going to go live: the 45 days advance notice requirement.

he credit card bill got signed into law this year, May by President Barack Obama after it was basically rushed through Congress in the preceding months. The credit card bill is set to become active in February of 2010, next year. In the meantime, credit card companies have declared open season for credit card holders, or so it seems. Right now, credit card holders are raising interest rates, raising fees, adding new fees, cutting available credit and basically doing everything they can to increase their profits regardless of how badly credit card holders are getting hit.

Considering what is currently happening to credit card holders, the amendment that is going to go active in a few week’s time seems trivial. A credit card holder has very little options nowadays, whether the warning for interest rate increases comes in 15 days or in 45 days. At the very least, a 45 day notice of an impending interest rate hike will give you a lot of time to consider how you are going to deal with your new interest rate.

What makes the amendment even weaker is the fact that it is not applicable to interest rates that are variable in nature. If you haven’t heard yet, credit card companies are busily moving their existing fixed rate credit card customers to variable rate cards. The move is being made to avoid the flexibility restrictions being forced by some amendments of the credit card bill on the credit card companies. However, credit card companies are required to give a 45 day advance notice if they change the amount that they add on to the prime rate. The sum of this amount and the prime rate is what makes up your variable interest rate.

The upshot of all of this is that, if you are one of the lucky few who still hold a fixed rate interest card, then you can expect to have plenty of time to mull things over when the credit card companies deliver news of their impending rate increase 30 days earlier than they used to. If you are one of the many who have been moved to a variable interest rate credit card, you’re out of luck unless the credit card companies increases their add-on amount. In which case, you get 45 days to think over how badly your finances are doing.

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