SC Department Of Consumer Affairs Explains Changes to Your Credit Cards

Columbia, SC—A lot of consumers haven’t heard about the Credit Cardholders’ Bill of Rights, but it has already made changes to their credit card accounts and more will be coming in February. The South Carolina Department of Consumer Affairs wants to explain the changes, especially before people start making holiday purchases.

Some of the changes are already in effect, while others will be effective next February.

Consumer Affairs spokeswoman Maria Audas says one of the changes already in effect is to protect you from big changes to your account. “Consumers have to get a 45-day notice of any major change to their credit card. That could include interest rates, other term changes. They have to get that 45-day notice, which is good for the consumer,“ she says. If your interest rate is going up, for example, you could decide not to accept the higher rate. Of course, you would have to close the account and pay off the balance, but for someone who carries a small or no balance each month, the 45 days would give them time to close the account and look for a lower rate somewhere else.

Another change already in effect is that credit card companies have to mail your bill at least 21 days before the bill is due. If they don’t, payments cannot be considered late. Before the change, credit card companies could mail your bill 14 days before it was due.

“Missing one payment on a credit card is going to affect your credit score a lot, up to 100 points,“ Audas says. “So it gives consumers extra time to make sure they make those payments on time.“

One of the changes coming in February is that credit card companies cannot increase your interest rate, fee or finance charge on outstanding balances except in limited circumstances. But the company can require you to pay back the balance within five years, or double your previous minimum monthly payment.

Another change coming next year is that the payment deadline must be 5:00 p.m. on the due date. Audas says some companies put in small print that payments are due at noon on the due date, so when a consumer’s payment comes in after noon they’re charged a late fee. Payment must also be due on the same date every month. If that date falls on a non-business day, payment is due the following business day.

“Another very important change coming in February is that adults, young adults under age 21 are not allowed to get a credit card unless they show they have the ability to repay it. So they have to have the income or the savings, the means to repay it, or they have to get a co-signer,“ Audas says. That will have a major impact on college campuses, where credit card companies typically try to get students to open credit card accounts, even if the students don’t have jobs.

The co-signer will have to be 21 or older, be able to repay the debt and will be held jointly liable for the debt.

Credit card companies will also have to tell you, in your statement, how long it will take for you to pay off your balance if you make the minimum payment each month. They’ll also have to tell you how much you would have to pay each month in order to have the balance paid off in three years.

But for all the new protections in the Credit Cardholders’ Bill of Rights, it has consequences that consumers may not like. Credit card companies may start charging an annual fee.

Consumers will have a harder time getting a card, while borrowers with bad credit won’t be able to get one at all. Interest rates are also likely to go up and credit limits may be lowered.