Do the new credit card rules go far enough?

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?

Comments

[www.facebook.com/profile.php?id=643565708]

Sorry, guys, that was I agree with the person following Richard...aka dee lanan.

Thanks for letting me blow off steam!
I'm back on track to get my Cc's up to date
and everything current...except for one exception!

[www.facebook.com/profile.php?id=643565708]

I agree with Richard.

All of a sudden, the 1.9% interest rate climbed to 25+% and when the recession hit me square on, I paid a small amount each month, that would have been the equivalent of the interest based on the original rate. After a few months of my paying a nominal amount each month, the CC co. threw up their hands, ignored my pleas for leniency and placed my card into collection with a totally un-businesslike agent! Such a turkey. I'd use stronger language, but this is on the web!

They've tried intimidating me, threatening me, calling me unheathly names, shoved my nose in the catdung...and continue to call and harrass me at every turn, almost weekly.

I'm a pensioner, and on commissioned sales. This doesn't matter to the a**hole collection agent. Obviously he's never been there, done that...and as a result, is still getting his wages paid, regardless of how insolent he is towards the customers of the original company. There really ought to be a law against such pervasive collection techniques, and from credit card companies who
continue to use these very derogatory methods to collect the outstanding balance, at over 20% interest, that they can. If the rates were even capped at double the originally offered rates, say 3.8% interest, or double that, to 7.6%, life would not have become so complicated!

But to jump to 25+% interest with penalties...no bloody way anyone in their right minds can cope with that!

Sorry, but I'm really unhappy about the quality of service and the actions of the collection agency, after the accounts exec. could not relate and refused to acknowledge and appreciate that we were in a recession--about a year ago.
I've continually sent payments, and they are totally thank-less.
It is my understanding that negotiating the unpaid balance less a lot of the unpaid interest is what the government has tried to implement. Not the case with this particular company. They are above the laws of Canada.

[www.facebook.com/profile.php?id=643565708]

I agree with Richard.

All of a sudden, the 1.9% interest rate climbed to 25+% and when the recession hit me square on, I paid a small amount each month, that would have been the equivalent of the interest based on the original rate. After a few months of my paying a nominal amount each month, the CC co. threw up their hands, ignored my pleas for leniency and placed my card into collection with a totally un-businesslike agent! Such a turkey. I'd use stronger language, but this is on the web!

They've tried intimidating me, threatening me, calling me unheathly names, shoved my nose in the catdung...and continue to call and harrass me at every turn, almost weekly.

I'm a pensioner, and on commissioned sales. This doesn't matter to the a**hole collection agent. Obviously he's never been there, done that...and as a result, is still getting his wages paid, regardless of how insolent he is towards the customers of the original company. There really ought to be a law against such pervasive collection techniques, and from credit card companies who
continue to use these very derogatory methods to collect the outstanding balance, at over 20% interest, that they can. If the rates were even capped at double the originally offered rates, say 3.8% interest, or double that, to 7.6%, life would not have become so complicated!

But to jump to 25+% interest with penalties...no bloody way anyone in their right minds can cope with that!

Sorry, but I'm really unhappy about the quality of service and the actions of the collection agency, after the accounts exec. could not relate and refused to acknowledge and appreciate that we were in a recession--about a year ago.
I've continually sent payments, and they are totally thank-less.
It is my understanding that negotiating the unpaid balance less a lot of the unpaid interest is what the government has tried to implement. Not the case with this particular company. They are above the laws of Canada.

[Ron Wencel]

I would like to see "0" limit credit cards, or pay as you go credit cards. It has become mandatory that people have credit cards in order to travel, make reservations, make certain purchases, or put up collateral. Even pay as you go credit cards make life difficult, when they are not recognized at many locations, or for many services. Even though they have master card, or visa on them, they still do not carry the power, even with huge amounts on them. Also with limited outlets they are hard to service. Why can't the banks be required to carry &/or recognize these in the same why that over charged credit cards are. If the money is not there, than it is declined. There is money to made with my service charges, but I guess it is not enough.

[jubbi]

that is very good for people that low income like me.

[Richard]

I like it just the way it is. I put EVERYTHING on my credit card, but pay it off every month. I pay no fees, no interest and once a year I get about $150.00 cash back. The key is not to buy anything you cannot afford. This concept is so simple that if you do not understand it, you deserve to pay ridiculous amounts of interest.

[dee lanan]

Credit card companies charge way too much for interest rates. Capping them at reasonable amounts would benefit all. Increasing the interest rate for people having difficulties seems counter productive. Lowering them to allow pay off would be better for both the companies and consumers. Most people I know would rather pay them off than file bankrupcy. But in the end the best way to avoid interest is not to carry a balance.