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Credit-card holders get protection under new rule
A new rule would prevent credit-card companies from raising interest rates on existing balances.
BAY AREA (Bay News 9) -- Federal regulators have put a new plan in place that will keep credit card companies from increasing their interest rates without a reason to do so.
Credit card holders often find themselves saddled with unexpected interest rate hikes, which can make paying down a high balance even harder.
Lori Mirandilla, a spokeswoman with Suncoast Schools Federal Credit Union, said the rate increases frequently happen to card holders, even if they haven't missed a payment.
"The issuer chooses to increase interest rates because of other activities on other accounts," she said.
Starting in July 2010, credit card companies will only be allowed to raise rates on new credit cards, future purchases and advances - but not current balances.
Mirandilla said she thinks this will help people saddled with heavy credit-card debt.
"I see a little bit of relief, at least a stoppage of those rates going up," she said.
But until the new changes go into effect, credit card users are encouraged to keep a close watch on their credit card statements to make sure they aren't unexpectedly hit with higher interest rates.
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