JONESBORO, AR (KAIT) "As a credit counselor, I think this has been one of the most unregulated industries out there," said credit counselor, Garry Patterson.
New laws taking effect now, make many credit card companies play by a different set of rules.
"The biggest thing now is how it's going to effect interest rates. The interest rates practices are going to be a lot more fair," said Patterson.
Patterson says credit card companies can no longer raise interest rates at any time. When you get a credit card, Patterson says the interest rate has to stay the same for one year. He says intro interest rates/teaser rates stay in effect for 6 months. In addition, Patterson says in the past, companies only had to give you 14 days to pay.
"They have to give you 21 days to get that card paid and no more weekend due dates," said Patterson.
Patterson says that due date has to stay the same every month. Patterson adds credit card issuers can no longer charge interest on late fees and over the limit fees. Over the limit fees will be able to be avoided because cardholders will have a set limit. You can opt in to change that limit. Patterson says it will be harder to acquire late fees, because you know exactly what dates to pay. He says when you do get that statement, there has to be more disclosure and more clearly defined rules.
"Your credit card statement is going to tell you how long it's going to take you to pay off that credit card at the minimum payment. That's going to motivate a lot of people," said Patterson.
Patterson adds credit card companies will also include how much money you have to send in each month to get that account paid off in three years.
Because in the past, the minimum payments were so small, they were literally designed to keep you in debt for 10, 20, 30 years," said Patterson.
Patterson says for those 21 years old or younger, you have to have proof you can pay that credit card or you have to have someone to co-sign. He says hopefully that will help keep people on the path to success rather than down a road of debt.
"The tragedy in this, they may not be able to afford to take the jobs of their dreams because it may not pay enough to pay all of their credit card bills," said Patterson.