New Credit Card Rules
The new rules for the credit card industry were released today and are effective as of June this year. The main objective is to reduce the indebtedness of the population, promoting changes in the minimum amount of the bill and clarifying the fees charged by credit card companies.
Although the changes have not been so significant, it will certainly contribute to reducing credit card debt and also ending several abusive cartoons used by operators.
The purpose of this article is to show the main changes brought by the new rules for credit cards, clarifying the most important items regarding fees, minimum payment, basic card and improper charges. This information was taken from the credit card booklet of the Proper Share Bank.
Only five types of rates will be allowed (previously more than 80):
- for issuing a duplicate card;
- for withdrawal in kind in the withdrawal function;
- using the card to pay bills; and
- in the case of an emergency credit limit assessment request.
Beginning June 1st, the minimum amount for monthly credit card payment will be 15% of the total invoice amount. Today there is no such requirement. From December 1, the amount rises to 20% of the total invoice amount. The goal is to avoid excessive indebtedness of households.
Two types of card
There are two types of card. The basic card, whose offer will be mandatory and will have lower annuity, can be used as a means of payment, with the customer can opt for installments at the time of purchase. The differentiated card is the one that has other coupled services, such as rewards or benefits programs. These advantages will have to be disclosed in a table visible in banks and on the internet.
Unsolicited cards and improper charges
Under the rules that are already in place, companies are still prohibited from sending cards without the consumer’s request. As in the case of improper collection, the customer should first seek the bank, then the customer service or ombudsman if not served. If unsuccessful, you can turn to the Proper Share Bank and consumer protection agencies.
These changes will go a long way in reducing the debt burden of many consumers. I already discussed a lot about this topic in the article “Easy credit helps or hinders” which I recommend reading for a better understanding of this serious problem.
Moreover, the increase in the minimum payment percentage also has only to improve the consumer situation in the medium term. Many mistakenly think that the minimum value is a “gift” card, where you can spend $ 500, but only pay $ 50. I made a very interesting criticism in the article “Minimum Credit Card Payment”.
Finally, control over overcharging is also a plus, credit card companies “invented” rates for anything, as was done by many banks a few years ago.
The only negative point, in my opinion, is the omission of the Proper Share Bank regarding the abusive interest charged by credit cards. The combination of these high rates with the lack of financial education is the main cause of the indebtedness of the population.