What You Need to Know about the New Credit Card Rules

Wondering what you need to know about the new credit card rules?

Next week new credit card provisions from the 2009 Credit Card Accountability, Responsibility, and Disclosure Act (CARD) will take effect, making it easier for consumers to understand their credit card bills and how interest charges are determined.

"Good Morning America" financial contributor Mellody Hobson explained what you should know about the credit card changes.



Two of the Credit CARD Act changes are already in place.

Consumers now have 21 days to send their payments in instead of 14 and credit card companies must give consumers 45 days notice if their terms change, instead of 15 days.

Although Hobson notes that one important exception to the 45-day notification rule is if your credit card company decides to reduce your credit limit – the company can do that without any warning.

Should this happen, Hobson said to call the company and ask for it to be reversed. If the company refuses, then pay any remaining balance as soon as possible since lowering your credit limit could affect your credit score.

On Feb. 22 another change will take effect that should help consumers better understand their credit card terms and debt, Hobson said.

New Credit Card Rules

Beginning on Monday, credit card bills must make clear how long it will take the consumer to pay off the balance and how much interest the consumer will pay if he or she only pays the minimum amount every month.

For example, if a consumer has $5,000 in credit card debt with a 14 percent APR, the credit card company must disclose that it would take 10 years to pay off the balance plus nearly $2,000 in interest fees if the consumer only paid the minimum balance every month.

Fee and Interest Rate Changes
After the Credit CARD Act was passed in May 2009, credit card companies pre-emptively raised certain fees and interest rates in order to replace the $50 billion in revenues they expected to lose, Hobson said.

In fact since June 2009, the top 12 banks and credit unions have increased their rates by approximately 23 percent, Hobson explained.

While the Credit CARD Act does not put a cap on increased interest rates, credit card companies must give customers 45 days notice on any change and they are not allowed to raise the current interest rate on consumers' existing debt, Hobson said.

Also, consumers can no longer be charged an additional fee for paying over the phone, by an electronic transfer or by mail, Hobson said. An extra charge will only apply if the consumer uses live services to expedite a payment.

Although the Credit CARD Act now requires 45 days notification of account changes, Hobson said it is still the consumer's responsibility to monitor all of the terms of their credit card statement.

Web Only Tip: Universal Default

The practice of universal default is also banned for existing credit card balances, Hobson said. This is when a card user's interest rate is increased based upon payment records for unrelated accounts, such as utility bills.

Changes Affect College Students

The last thing a college student needs is more debt. A Sallie Mae study found that in 2008, college seniors with at least one credit card graduated with an average of $4,138 in credit card debt.

To protect young people from incurring debt the Credit CARD Act has made it more difficult for college students to get a credit card, Hobson said.

Credit card companies can no longer offer a card to someone under 21 without a co-signer or proof of proper income, Hobson explained. Nor can the company increase the limit on the card unless both the co-signer and the student agree. Offering inducements to sign up for cards - such as free t-shirts or beach towels – on or near a campus are also banned.

Hobson recommends that if your child does need a card, to add him or her as an authorized user on your own credit card.

Being an authorized user will help teach them to live within their means and also help them build up their credit history and could improve their credit score if you make on-time payments, Hobson said.

Just What Exactly is the Black Smoke Monster on Lost?

I've found myself wondering just that while watching Lost. At first watching and recalling the ancient symbolisms I thought "Could the Black Smoke Monster be the Angle of Death that was part of the last plagues upon Egypt during the Exodus?" You have to admit there are many biblical parallels here with the characters.

As Ben explored the chamber beneath the Others' temple that seems to be Smokey's lair, he comes across a variety of hieroglyphics etched into the walls. But one in particular caught his eye: A strange creature kneeling in front of a snake-like (Smokey-the-monster-like?) entity. The creature on the right looks like it could easily resemble the four-toed statue. Even though the only full-size glimpse we've had of the statue was from the back, many are speculating that the statue is of Anubis, the Egyptian god associated with the afterlife who protects the deceased and guides them to the great beyond. Anubis is usually portrayed as half-jackal (top), half-human (bottom).

Thinking on those grounds the animal-headed human in the hieroglyphic Ben is fixated on is probably based on Anubis, though in actuality, no Egyptian scene looks like what's shown on Lost. I suspect that the colossus is also meant to be Anubis, too. But it would appear to be actually more of a hybrid of Anubis and Taweret, the demon-wife of the Apep, the Egyptian's original god of evil. (It's said that Apep was only present at night, and therefore any evil happenings during the daytime were attributed to Taweret). The thing on the head definitely looks like Taweret's, but she never wears a kilt, which is clearly there in the back shot of the colossus. The colossus is probably holding two ankh-signs, like the one Anubis holds in this image, but he's holding them like Taweret holds the two signs she holds, which are 'protection' signs, not ankhs. We should also note that the four toes on the statue fragment are more Taweret than Anubis, who has a human body and therefore five toes.



Another interesting fact about Taweret: She's the goddess of maternity and childbirth, the protector of women and children who was said to guard mothers and their newborn children. The creatures she's made up of—hippopotamus, crocodile and lion— are all animals that would kill to protect their young. So if the statue does have elements of Taweret, and it was destroyed, could that explain why mothers who conceive on the island can't carry to term?

The other hieroglyphics in Smokey's Lair are actually quite good, even though they don't really say anything. I suspect they were copied from some publication of the Book of the Dead, the ancient Egyptian funerary text.

We could theorize until the cows come home about what this all means—is the smoke monster supposed to represent Apep, the god of evil, or is he more akin to Anubis, determining the afterlife of the dead? —but I'll leave that up to you.