CreditFBi

Credit card issuers do not have to warn you that they are closing your account. If your credit card account’s been closed, here’s a few things you can do.

• Contact the credit card company. It might review your account and decide to keep you.
• Check your credit report regularly from the three major credit bureaus to make sure no incorrect information is posted that would cause a card issuer to drop you..
• Shop for a new card from one of the thousands of credit unions and small community banks..
• Carry cash or more than one credit card, in case your card is suddenly denied.

Lately some finance companies have been canceling credit card accounts without warning the cardholder. Such cancellations, being felt by consumers in Maryland and across the country, highlight a little-known gap in federal laws governing credit cards. Though Congress has toughened disclosure rules for credit card companies – by requiring 45 days’ notice for making significant changes in interest rates or other terms – canceling cards without warning is still allowed.

“Apparently, the closure of a card is not considered a material change in the terms,” said John Ulzheimer, president of consumer education at Credit.com. “I can’t believe I’m telling you this with a straight face.” Canceling cards and cutting credit limits without notice has been a practice of long standing. Card issuers say that if they warned consumers about a looming cancellation, customers would run up their balances before they lost credit and card issuers would be on the hook for even more money. Read the rest of this entry →

Bank of America Corp. said Tuesday it will cap the fees it charges customers for overdrawing their accounts, backpedaling on the hikes the company imposed just this year. Starting Oct. 19, Bank of America no longer will charge overdraft fees when a customer’s account is overdrawn by less than $10 in one day.

A $35 fee will still be levied if the account isn’t brought into balance within five days.

The Charlotte, North Carolina-based bank also will limit to four the number of times an overdraft fee can be charged on an account per day. Just this year, the bank had raised that cap from five to 10. It also raised the fee this year for the first overdraft in a 12-month period to $35 from $25 — a hike that still stands. Read the rest of this entry →

JPMorgan Chase & Co. also will be overhauling its overdraft fees, a spokeswoman said late Tuesday. Starting in the first quarter of 2010, the bank will make overdraft protection opt-in for all customers, post transactions to accounts as they occur, and eliminate fees when accounts are overdrawn by $5 or less. It will also reduce the maximum number of fees per day to three from six.

The changes will apply to all customer accounts, the spokeswoman said.  The banks’ turnaround comes as credit card reforms passed earlier this year will soon limit banks’ ability to raise fees and interest rates and require greater disclosure about costs.

Just a day after the United States proposed its new regulations to the credit card industry, Canada proposed its  rules to protect credit card holders.  Under the new regulations:

• Interest-free grace period of 21 days for balances paid in full, up from the old 15-24 days and credit card companies would no longer be able to charge interest during that grace period when balances are paid in full for that month.
• Credit card companies would also have to issue monthly statements to indicate how long it will take to pay off a balance if only minimum payments are made.
• Simplified credit card contracts and application summaries indicating grace periods, interest rates, and all other fees.
• Credit card companies will be prohibited from contacting customers or their families outside of specified hours on weekdays and weekends.
• Credit card companies will need to get card holder’s consent  prior to credit limit increases.

The credit card rules doesn’t include interest rate caps.  However credit card companies are required to notify card holders in advance for any interest rate hikes.