Sweeping changes are coming to the credit card world, with issuers facing many new rules and regulations starting February 22nd. The Credit CARD Act will restrict issuers’ ability to raise interest rates, prohibit them from charging various fees, and more. As a result, according to an article in The Wall Street Journal, issuers are quick at work raising their rates ahead of the implementation date. According to the article, some are sending fine-print notices telling cardholders that their interest rate will go up unless they opt out of the change. While opting out will likely lead to the cancellation of the card, the article noted that a person carrying a balance could opt out and then continue paying off their debt under their card’s current terms.
One industry insider told me that all credit cards will soon charge an annual fee. On the one hand, that prediction sounds credible given the new legislation’s restrictions on other fees. However, I have to believe there will be exceptions. After all, when most airlines began charging baggage fees, Southwest kept allowing two bags to be checked for free, and breaking from the pack has proven to be good for their business. I checked with my sponsor, Christian Community Credit Union, and was told they have no plans to add an annual fee to their credit cards.