Since regulators began making new credit card regulations a couple of years ago, the changes just seem to keep coming.
Here are a couple that you need to know to protect yourself…
It is now legal for merchants to set a minimum purchase amount for credit card transactions. Some have already been doing that, but until now, it was in violation of credit card network rules.
The reason for the new regulation is to give relief to the merchants. In some cases, merchants have actually losing money on sales. They have to pay a “per swipe” fee plus a percentage, so they go in the hole every time you charge an 89 cent candy bar.
Rules say the minimum cannot exceed $10. So if you plan to make small purchases, put some cash in your pocket, or plan to use your debit card.
But watch out… this may change soon, as retailers also have to pay when you swipe that debit card. New debit card regulations are in the works that may extend the minimum purchase to them as well.
Changes to existing credit card accounts:
You’ve probably read that under the CARD Act, your credit card issuer must give you notice of changes to your account 45 days before making the change. That’s true – but only certain changes fall under the rules. This includes changes to your interest rate or to the fees that were disclosed when you opened the account.
They do not have to give you fair warning if they close your account or reduce your credit line!
To avoid damaging your credit scores with an over-limit notation on your credit report, and to avoid the embarrassment of a turn-down at the check-out counter, be sure to check your credit limit regularly. Even if you pay by mail, set up your on-line account so you can have fast access to your account before you go shopping.
Unfortunately, consumers with good credit scores are very likely to be caught in this trap. One of the primary reasons for credit line reductions and account closures is inactivity on the account. Now that they are not allowed to charge an inactivity fee, credit card issuers are choosing to simply “get rid” of unprofitable cardholders.
If you’ve been “saving up” credit on an unused account with the idea of having it there just in case you need it, make a small change in your habits. Every month or two, use that card for some of your normal everyday purchases. Then pay it off when the bill arrives.