Advance Notice for Interest Rate Increase – CARD Act 2010

Starting August 20, 2009, credit card issuers must send at least 45-day written advance notice of interest rate increase or other significant credit card changes. Significant changes include increases in any fee or finance charge. Credit cardholders must be notified of their right to reject, or opt-out of, the changes.

No Penalty for Opting-Out

If you decide to opt-out of the credit card changes and close your credit card account, your card issuer can’t charge extra fees because you closed your account, default your account, or require you to pay the balance in full immediately. Your credit card issuer can: increase your monthly payment by up to 100% (double it), require you to repay your balance within five years, or they can leave your repayment plan the same.

No Rate Increases on Existing Balances

Credit card issuers cannot raise your interest rate on existing balances (no retroactive interest rate increases), except in certain situations.

No Advance Notice of Minimum Payment Increases

While the change may seem significant to cardholders, the Federal law does not require credit card issuers to send advance notice of minimum payment increases.

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