The CARD Act is about more than credit cards
Strange, but true. Congress has a tendency to pass minor or unpopular legislation under the cover of supported changes. It's a bit of a bargaining chip - you give me this, I'll vote to pass that - and it happens all the time. "The CARD Act is one of those things that was going to pass, so they tacked on something that might not have passed any other way," explains Schwark Satyavolu, co-founder of BillShrink.com.
So what else in the CARD Act has managed to slip under our radar? Truth be told, it's very consumer-friendly. But that doesn't mean there aren't a few things you should be aware of:
First, the basics
Under the new laws, you must opt in to over-the-limit programs - if you don't, and you hit your max, your card will simply be declined (currently, every time you go over your limit you are charged a fee). Any payments you make over the minimum required will be assigned to the balance with the highest interest rate - not the other way around, as it is now. And interest rate increases can only be retroactive in extreme circumstances - when you're 60 days late, for instance.
Under 21 - or have a kid who is? Listen carefully. Under the new laws, people under age 21 will need a co-signer for a credit card if they don't have enough income to support the payments on their own. That means if you want your college student to have a credit card (for emergencies, or simply to start building a credit file - both are good ideas), they need to snag one in the next, uh, six days.
Why not just co-sign? Because then you're liable for the debt they incur, any late payments they make, and, worse case scenario, default.
Be ready to show documentation. If you're on the market for a new credit card, you're now going to be required to show proof of income. No big deal with most bank credit cards - as long as you meet the requirements - but a bit inconvenient for retail cards, says Bill Hardekopf, CEO of LowCards.com. "That's where it's going to be a hindrance. When you go to the mall, you don't bring your pay stub or your W-2." Many retailers are justifiably upset, so Hardekopf says we may see changes to this portion of the Act in the future.
Pay on time. This is important to your credit score, but it's also important to your pocket. You can no longer be charged for making a phone payment, but you can be charged for an expedited payment, says Hardekopf -- when you're down to the wire and need to pay on the due date.
Prepare to (possibly) pay more. The card companies are losing major money here, and they need to make it up somewhere. "Folks who have always paid off their bill and carried their credit responsibly may now start to see a lot more fees," explains Satyavolu. That may very well mean a return of the annual fee.
Jean Chatzky is an award winning journalist and best-selling author. Her most recent book is "Money 911." Check out Jean's blog at jeanchatzky.com and learn more about the The Debt Diet Online.