Posted: 12:50 pm PST February 22,2010
SEATTLE -- When
you open your next credit card bill, you could get a big surprise.
Under
new regulations that went into effect Monday, your bank will have to
tell you how long it'll take to pay off the bill if you only make the
minimum payment.
The new regulations are designed to cut credit
card holders a bit of slack.Under the new Credit Card
Accountability, Responsibility and Disclosure act, it'll be a lot
tougher for people under the age of 21 to get credit cards.
Now,
they'll have to prove they can actually pay the bill -- or have a
co-signer.
"It was surprisingly easy when I applied for a credit
card, actually," said Christa Davis, a University of Washington student. "They just said, 'Here, have this credit card.'"
"I think it will
help students," said Tim Mensing, a UW student. "I think it'll help us
hopefully not incur as much debt and have a brighter future."
Also,
when you make more than the minimum payment, the extra will now go to
pay off your highest interest rate balance first, helping you get out of
debt.
The banks will also have to stop moving around your due
dates.
"The interest rate on the money you've already borrowed
will stop going up," said Gail Hillebrand of Consumers' Union. "It can't
be changed to go up unless you pay 60-days late, miss two payments,
unless you have a promotional rate that's expiring or you have a
variable rate that goes up and down, But all those other baloney reasons
for raising your rates, or for no reason, will no longer apply for the
money you've already borrowed."
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