Dear Liz: Can you tell me if the new credit card reform bill will apply to interest rates that were raised in the past? In other words, if a rate was unjustly raised, will the card issuer be obligated to lower it when the new law begins?
Answer: No. Credit card companies won’t have to adjust rates and can continue to raise rates for any reason until the law goes into effect in February 2010. At that point, issuers will be restricted from raising rates on existing balances unless the increase is because of a change in the card’s variable rate, or the rate was in a promotion period which has ended, or the cardholder is 60 days or more late with a payment.
Card issuers will be able to raise interest rates on future purchases but will have to give 45 days’ notice before doing so. The coming restrictions mean card issuers are likely to continue jacking up rates and fees while they still can, industry experts say.