New Credit Card Regulations Take Effect Monday

by Diane Tuazon
NewsWest 9

MIDLAND - Some consumers try to avoid the use of credit cards.

"I don't own credit cards I own one just to set credit history but I try to stay away from them," Chris Rohrer, who dislikes the new regulation, said.

Swiping that card at the check out counter will soon have a whole new meeting for some consumers.

"Consumer spending has always been out of control. It's sad that the government has to step in and control some spending," Small Business Development Center Director, Enrique Romero said.

Beginning Monday, new credit card regulations will kick in some of which will benefit consumers. One of the biggest changes is that credit card companies must give the consumer 45 days notice before making any changes on the account; changes that include interest rate hikes.

"If the consumer disagrees, they can close account and will be given 5 years to pay off the balance," Romero said.

It doesn't stop there; with part of the new 'Credit Card Act' creditors won't be allowed to charge you over the limit fee instead, your card will be denied. 

However one regulation states that creditors will no longer allow anyone under the age of 21 to obtain a credit card without a co-signer and that got mixed reactions from consumers.

"21 is an old age. I don't really agree with that, but then again you can get in a lot of trouble with debt," Rohrer said.

"I walked the campuses when I was 18 and got credit cards offered to me, and some teens think it's free money, it's good to have a co-signer," Todd Williams, who likes the new regulation, said.

Some consumers say with all these new credit card regulations they're curious to see what strings will be attached.

"When the government regulates things like this, the bank always finds a way to make up for it somehow; I'm waiting to see what they do," Williams said.

Consumers can also expect their credit card statements to look different.

Statements will now include how long it will take you to pay off your balance if you only make minimum payments.

It will also include contact information for licensed credit counselors if you find yourself in credit trouble.