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The New Credit Card Disclosure
Changes and How They Impact You

Most Americans carry from five to 10 credit cards in their wallets, each with their own "fine print" of fees, interest rates, rules and regulations. Now the Federal Reserve Board has proposed changes in credit card disclosures that are geared to make them more consumer-friendly.

credit card disclosure

Under the proposed changes, credit card companies would have to give you 45 days notice, instead of just 15, if they plan to change your card's terms.

It's been nearly three decades since the Federal Reserve Board has made such changes.

Their proposed rules are the result of a 2.5-year study in which small groups of consumers were questioned about how they'd like the regulations to be worded.

What are the Proposed Changes?

The changes, which could take effect by the end of 2007, are designed to help consumers understand what fees and penalties may be charged by their cards, as well as open an avenue for competition. Once consumers are empowered with more information, for example, they can seek out cards that have better terms.

If the proposed rules are passed:

  • Credit card companies would have to notify consumers 45 days before terms of a credit card contract are changed, instead of the current 15-day window. This allows consumers to search for a new card or pay off their balance first.

  • Advance notice would also be required if an issuer was going to raise interest rates because of a late payment, going over credit limits or not paying a different loan on time. Currently, no notice is required.

  • Certain disclosures would have to be printed in larger type to make them more noticeable.

  • Monthly statements would have to state what interest and fees had been paid for the year.

  • Credit card companies would be required to clearly state that low rates on balance transfers apply only to that balance. Companies would also be required to apply payments to the debt with the highest interest rate (many currently apply them to the debt with the lowest interest rate).

  • Statements would have to include the payment due date on the front, along with a cutoff time for the payment (if it's before 5 p.m.)

You can e-mail your comments on the proposed changes to the Federal Reserve Board at regs.comments@ Include "Docket No. R-1286" in the subject line and be sure to get them in by October 12, 2007.

  • Issuers of sub-prime cards would have to disclose that large fees would apply and cut into available credit.

  • Credit cards could not advertise "fixed" interest rates unless they truly did not change (or the fixed period was clearly stated).

Tell the Feds What You Think

While consumer groups are applauding the proposed changes, some say that more needs to be done. For instance, the rules would help educate consumers about their cards' terms by disclosing unfair practices, but would not ban the practices altogether.

Among the more common abusive practices that groups want stopped is the practice of charging interest on debts that have been paid off. For instance, if you buy $8,000 worth of furniture and pay off $7,500 by the due date, some companies will still charge you interest on the full $8,000.

"The overall point is that these disclosures could be very helpful but they certainly aren't enough," said Ruth Susswein, a deputy director for Consumer Action.

The Federal Reserve is accepting comments from the public on their proposed changes until October 12, 2007. They will use the comments to make any necessary changes before issuing the final ruling.

If you'd like to put in your two cents on the issue:

  • E-mail your comments to: (include "Docket No. R-1286" in the subject line)

  • Fax your comments to: 202-452-3819 or 202-452-3102

  • Mail your comments to:

Jennifer J. Johnson
Secretary, Board of Governors of the Federal Reserve System
20th St. and Constitution Ave. N.W.
Washington, D.C. 20551

Recommended Reading

10 Important Tips You Should Know About Credit Cards to Save Money, Time & Grief

Online, Phone, U.S. Mail or In-Person: Where is Your Credit Card and Personal Identify Safest?

Chicago Tribune June 17, 2007 May 24, 2007

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