Changes in credit card regulations, payments

We can thank Obama and Congress for finally ending some of the more obvious ways in which the big banks screwed us. Below is the proof, in a reply sent to me from my bank regarding interest charges that I didn't think should be there. So, if you're making more than the minimal monthly payment and you had a big zero-APR balance transfer like I did, now those payments will go toward paying off purchases at the usual, higher purchase APR, and not toward paying off your zero-interest balance transfer amount, so that high interest charges don't accumulate.

In anticipation of this and other regulatory changes, however, in 2009 and early 2010, the big banks jacked up their fees and standard purchase APRs, and not just on the people with bad credit, but specifically on the cardholders who pay off their balances regularly. In response, you should have cancelled your card, like I did for one, or declined the increased APR, which I did before I cancelled the card. Taking your business to a local or regional bank is the best way to go.

By the way, under the new CARD Act, as of February 2010, credit card issuers can't increase your interest rate unless your payments are over 60 days late, and if you then pay on time for 6 months, the original rate must go back into effect.

Check it out:

http://ctwatchdog.com/2009/10/21/citi-bank-of-america-jacking-up-credit-card-fees

http://motherjones.com/mojo/2009/10/credit-cards-scrambling-jack-interest-rates

http://www.whitehouse.gov/the_press_office/Fact-Sheet-Reforms-to-Protect-American-Credit-Card-Holders/

Date: 02-24-2010 08:31:08

From: Credit Card Support

Subject: Re: Fees/Interest Charges

Dear Mr :

Before the government regulation changes went into effect 2/22/10, any payments received, applied to the lowest rate on the account each month. Your payments received before 2/22/10 paid down the 0% promotion before the purchase balance. The $ on your statement ending 2/17/10 is the interest charged to the purchases on your account.

After 2/22/10, the payment application method changed. When the minimum payment is received, it will be applied to your account in the following manner:

1. Deferred interest promotion (if expiring within 2 months)

2. Blueprint payment

3. Lowest to Highest Annual Percentage Rate (APR)

Any payment amount received that is over your minimum payment will be applied to your account in the following manner:

1. Deferred interest promotion (if expiring within 2

months)

2. Blueprint Payment [I don't even know what this is - J]

3. Highest to Lowest APR

If you have two promotions at the same rate, the one with the longest duration will be paid first. If you have two promotions at the same rate and the same duration, then the highest amount will be paid first. If you are enrolled in Blueprint and you have more than one APR on your account, your payment will be applied to the highest APR first. You will not be penalized if your Blueprint payment is not met, however, this means your Blueprint goal may be extended or recalculated. Thank you,

Cynthia R

Email Customer Service Representative

1-800-436-7927