Being up to date on the latest developments in credit card lawmaking and banking policy is always a wise investment of one’s time. That’s why at PayLeap, the web’s premier ecommerce payment gateway, we like to keep you informed on changes that can affect the way do business with credit cards.
As of August 20, creditors must now notify cardholders 45 days in advance of any major changes in terms including interest rate or fee increases. In light of this, banks have responded accordingly. Cardholders may see diminishing benefits including the removal of travel insurance or hikes in interest rates and introductory APRs. These policy changes come as a direct result of the uncertainty associated with the newly passed CARD Act. In essence, banks are cutting benefits in order to compensate for the 45 day grace period that cardholders are now entitled.
In the midst of all of the speculation, there is one thing that seems probable– any APR adjustments from the Fed are doubtful. Minutes from the Fed’s last meeting document that they seem to be satisfied with the current key lending rate, which continues to remain at exceptionally low levels. This rate is used to derive banks’ prime rates which influence the APRs for variable rate credit cards. Many think that rates will be stable as the effects of an increase would be contradictory to aiding the economy in its current state.
Whatever the case, cardholders should stay on the lookout for policy changes with their creditors, and actively follow the updates in new legislation.
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