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Newer credit card rules round the corner to prevent abuse by issuers
[12:00:00 AM Friday, April 15, 2011]
Finding higher credit limits will prove to be a herculean task for card holders with poor credit standing. The Federal Reserve is all set to implement a new set of rules as a follow-up to the CARD Act and has designed them to prevent abuse of credit cards.
According to one of the rules that have been approved by the Federal Reserve, credit card issuers have to ensure that they thoroughly verify the repayment ability of the applicant before approving their application form. The repayment ability has to also be taken into consideration before increasing the credit limit on the card. In order to ensure this is adhered to, credit card issuers have to now consider the income of only the individual applying for the card and not the ‘household’ income.
In the recent past, it has been noticed that some lenders do offer cards with promotional deals, but revoke it at the slightest pretext. In order to curb this practice, the Federal Reserve has approved another rule that stipulates that lenders, at no point of time, should either revoke or increase the interest rates until the promotional offer ends. The only exception to this is when the card holder delays the payment of dues for over 60 days.
The new rules were particularly designed to close the loopholes of the CARD Act and also prevent people from getting into debt traps without any means to pay it off. Though these rules seem to be in favor of the card holders, it surely is going to make it tough for dependent spouses to find credit cards to establish a good credit history.
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