Commentary: The good and bad of new credit card rules

Usually when my credit card bill comes in, I just check the balance and the due date.

With the January bill, however, I noticed that the interest rate had nearly doubled. We seldom use it and pay it off as soon as possible if not within the same billing cycle. I couldn't help but wonder why this had happened. We are good people.

Apparently the card company wanted to get its fingers in my wallet before the Federal Reserve's new Credit Card Accountability, Responsibility and Disclosure Act of 2009 took effect Monday.

Under that new law, companies cannot raise interest rates on existing balances for a year. Plus, they must be more open in disclosing the terms of their cards.

Sounds good doesn't it? Well, it is and it isn't.

"I didn't see anything harmful in the law," said Johnny Cantrell, chief operating officer of the non-profit Consumer Credit Counseling Services, a subsidiary of Apprisen Financial Advocates. "But I thought there would be a lot more to it, especially when I saw the size of it."

The law is more about the regulation of the process than about the consumer, he said. Still, there are some good things in the law.

"I just extract the positives to help the consumers we see," he said.

Those positives include a disclosure on the bill each month that details how long it will take for a cardholder to pay off a balance if making only minimum payments. It will also tell you how much you would need to pay each month to pay off your balance in three years.

"It's part of the language of transparency," Cantrell said. "It shows where you are headed."

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