Thursday, December 18, 2008

New credit card rules will help some seniors

In the most sweeping changes to credit cards in decades, federal regulators on Thursday approved new rules to crack down on so-called unfair and deceptive practices by card issuers, such as raising interest rates on existing debt.  The rules, issued by the Office of Thrift Supervision and expected to be approved later Thursday by the Federal Reserve and the National Credit Union Administration, come at a time when the economy has plunged into recession, and loan delinquencies and charge-offs are swelling as borrowers struggle to pay their bills.

The rules, which take effect in July 2010, will let credit card companies raise interest rates only on new credit cards and future purchases or advances, rather than on current balances.  They also restrict such lender practices as allocating all payments to balances with lower interest rates when a borrower has balances with different rates.

Source/more:  USA Today, http://www.usatoday.com/money/perfi/credit/2008-12-17-credit-cards-new-rule_N.htm

Credit card debt is a leading cause of senior bankruptcy filings, see http://www.consumerlaw.org/initiatives/seniors_initiative/credit_1.shtml

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