Janice A. Oser, Esq.

Time to pay the credit card bill. Throw out those glossy inserts and get the check in the mail (or click the “Pay” button).

No, wait! Those glossy inserts may not be just about stuff you can buy, or the required Privacy Notice (yawn). These days, they are likely to include a “Notice Regarding Changes to Your Account,” and that’s something you should definitely read.

A previous column dealt with changes that were coming in federal regulations about credit cards, specifically, about terms that were widely considered to be unfair [A FAIRER DEAL FOR CREDIT CARD HOLDERS, January/February 2009]. The changes in the regulations, which were the outcome of a lengthy process that began in July 2007 and ended in December 2008, were not to become effective until July 1, 2010.

“Not soon enough!” was the outcry, and our legislators must have listened. In May 2009, the Credit Card Accountability Responsibility and Disclosure Act of 2009 (let’s call it the Credit Card Act), amended various statutes dealing with consumer credit.

In the words of the Federal Reserve press release announcing a new regulation, the purpose of the Act was “to establish fair and transparent practices for open-end consumer credit plans, including credit cards” (July 15, 2009). (An open-end credit plan “keeps on giving,” so to speak, in that as you repay the amount borrowed you can keep borrowing, in contrast to a closed-end loan, which is to be repaid in full by a specified date.)

Regulations implementing the Credit Card Act were slated to go into effect in three stages, on August 20, 2009, February 22, 2010, and August 22, 2010. An interim final rule became effective on August 20 – interim, in that it is subject to public comment and possible revision, but final, in that, unless and until it is revised, it is in effect. This rule requires credit card issuers, among other things, to provide written notice to consumers 45 days before raising their interest rates or making a significant change in terms.

Your bank might well have sent you a notice of such changes with your August bill in order to beat the deadline for the 45-day prior notice requirement. If you tossed it, you should still be able to find it if you sign on to your account on line.

If you think that it doesn’t matter because you always pay your bill on time, and don't pay interest or late-payment fees, you might want to think again. A “significant change in terms” could include an annual fee where there was none before, or radical alteration of a rewards program.

For months before the passage of the Credit Card Act, card companies claimed they would have to add or increase annual fees or cut rewards programs sharply in order to make up for revenue lost because of proposed or pending restrictions. Maybe so, maybe not.

The bottom line, though, is that you need to protect your bottom line by checking those glossy inserts that come with your credit card bill, and reading carefully any notice of a change in the terms or conditions of your account. Even if you decide you don't want to change your credit card, at least you won't be caught unawares.