Paying off your credit card bill just got a little bit easier. Maybe.
On January 1, 2010 a series of new rules will take effect that force banks to clarify payment details on your credit card statement and provide a standard grace period to pay off your plastic.
Under these rules, credit card companies must also give you advance notice of interest rate increases, stop credit limit increases without your consent, and limit debt collection practices.
But you'll have to wait until next September before the biggest change kicks in, when banks must give you a mandatory minimum 21-day interest-free grace period on all new credit card purchases when the outstanding balance is paid in full.
Interest rates and fees still high
Critics of the credit card regulations say the changes do little to help consumers.
"Skyrocketing high interest rates and the growing number of superfluous fees are the biggest hindrances for consumers," said New Democrat MP and consumer protection critic Glenn Thibeault in a statement. "If the government wants to protect Canadian credit card users, it must go all the way and implement substantial regulations that would put a cap on interest rates and eliminate many of the excessive fees that consumers are being charged."
Thibeault proposes that capping credit card rates at five per cent above prime would help "Canadians who are stuck paying interest rates as high as 25%" and would provide better protection from gouging, giving real relief.
Your new statement
Expect your credit card statement to look different in the new year when lenders must add a summary box that describes all fees and shows you how long it would take to fully repay the balance if you only make a minimum payment every month.
For example, under the new rules a summary box may show that a $5,000 credit card balance at an 18% interest rate would take 11 years and two months to pay off if you only make minimum payments. The total interest paid is about $2,873 and the total tab is $7,873.
But you don't have to wait for these new changes to see how interest rates and minimum payments bust your budget. Check out this Credit Card Calculator to get the facts today and see how many years it will take to payoff your balance. Results may shock you.
For more information on the changes coming to your credit card, see the regulations in the Canada Gazette.
Your thoughts
Do you think the new credit card rules go far enough? What would you like to see done differently by lenders?
People are responsable for their debts; it seems
to me that going after Credit Card Companies who
in the business of making money which is a given
Right, and then some organizations go after them
from their own self-interests. This is a Free Country
and we are all free to make money.
If you cannot pay your bills, then don't get a card!
Suck it UP!
Posted by: Diane Roof | 10/13/2009 at 11:58 AM
reply to Posted by: K Khan | 10/06/2009 at 05:16 AM
you must have a good job mr kahn or won the lottery, not everyone is as luckey as you are to have the huge incomes and job to support the things in life folks have to bear due to illness, handicap etc etc. Sound like you have been blessed by God, monetary wise , but are lacking in compassion and understanding of other human beings that have no alternative but to borrow, not everyone is making the 100,000 a year salary so they can pay for unforeseen things that might happen in the future.
Banks are what I call legalized thieves they alter contracts in a subliminal and almost sinister way that people get trapped by using the card especially in an emergency. Banks and card companies need to lay out the Charges and terms in a simple way, Also they need to reduce those rates to half of what they charge, this also applies to Oil and gas companies21%-28%, and retailers 22-29%, Banks 12-19% seems strange when they can borrow from the Bank of Canada at .25% and also They only pay the depositor.25% they are all userus rates and then to top it all off they have hidden fees. they are way out of line and are not doing much for serving people based on the fees they charge. I remember when you went to a bank and got real service now its for standing in line and waiting and when you use their mechanical tellers you pay a fee that is outragous. Just legal rip off thats all the bank system is so that those on top can write themselves a big bonus check after the annual shareholders meetings are over. BANKING is way to FAT ON FEES AND hidden CHARGES a complete revision of that system needs to be done.
Posted by: fred shinkle | 10/13/2009 at 12:26 PM
I agree totally with Glenn Thibeault, NDP MP, finance critic. The banks' high interest rates are outrageous. I fully understand they are in business to make a profit but how do they expect common people to pay back when the interest charges are so extreme. I think lowering the rates will reduce the number of people to file for personal bankruptcy and, therefore, the banks will be able to recoup losses.
Posted by: Aida | 10/13/2009 at 01:21 PM
When it comes to credit card use and fees, consumers need to remember that it is a case of 'Caveat Emptor' - Buyer Beware! As a consumer, when we use a credit card for purchases, we are purchasing the lending instute's services, so I would recommend we shop around no different than if we were buying a car, a pair of shoes or hamburger. Get the best deal possible. Remember that banks are NOT your friend ... they just LOVE the colour of your money. How many billions of dollars did they make last year?? Hmmmm ... and how many of us got a raise or were able to keep our jobs in this recessionary economy?? Unfortunately, the ones who pay the exhorbatant interest fees are the ones who can least afford to - they are our middle class working poor. Totally legal and so unethical.
Posted by: Naomi | 10/13/2009 at 11:17 PM
When applying for credit everyone knows the rates and fees.
They are clearly stated on the application and should not come as a surprise when you receive your statement.
If you don't have it don't spend it,...it is that simple!!!!!
Posted by: suck it up | 10/14/2009 at 04:19 PM
I feel very strongly that all lenders should pay back the creditor the interest they stole from them.
My reasoning is this, if i borrow 1000.00 i sould pay back 1000.00 and not another cent. because i did not borrow anymore than 1000.00. Also no company should be bail out with Tax payers Money, where are all those Millons they make before they the mismanagement begins?
I strongly believe wrongs don't go unpunish. God sees every evil and every deceit and reward the Lovers of money accordingly. Remember the Zacchaeus story? Lenders are like the tax collectors in Jesus' days on the earth. Make no mistake they will pay for taking more then their should in this life time and also in the judgement of God .Guarantee !!!
Posted by: tony | 11/16/2009 at 02:18 AM
i take care of my all reciepts and mailing.and also balance sheets.if you struggle to make a minimum payment, credit companies raise the interest rate, charge phenomenal fees, etc.At least you get paid for doing business with them.
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Posted by: jeremy | 02/18/2010 at 08:47 AM