NEW YORK (AP) _ A sweeping credit card law that takes effect Monday has been widely anticipated by consumers who believe banks have been taking advantage of them for too long.
The law that President Barack Obama signed last May was supposed to prevent banks from using tactics that put borrowers deeper into debt. Yet, it still allows loans and cards with crushing terms.
One reason is that card companies had nine months to prepare while certain rules were clarified by the Federal Reserve.
One thing is certain, a cardholder’s statement is going to contain an ugly truth: how much that card really costs to use. The consumer will now know how long it will take to pay off the balance.
The law does allow banks to create new fees and raise old ones. It also permits some interest rate hikes with ample notification. But it shields card users from sudden hikes, excessive fees and other gimmicks that companies have used to drive up profits.