In May of this year, President Obama signed the much touted Credit Card Accountability, Responsibility, and Disclosure (CARD) Act. Though the crux of all this credit reforming was to prevent credit card companies from swindling the money away from their customers, the truth is that they were not the only targets. According to the new legislation, those in-store retail credit offers are considered credit cards, and as such, they fall under the same regulation.
So what will this mean for retail credit? Here are a few anticipated changes:
* No more three month“Same as Cash” Offers. Under the new legislation, all credit promotions must last six months or more.
* No more unexpect increases in interest rates. Under the new rules, customers must be at least 60 days late on their payments before a new, higher interest rate can be applied.
* The higher rate gets paid of first. Any money above the minimum payment will be applied to the expenses with the highest interest rate first.
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