Today is the effective date for the first phase of the Credit Card Reform Act. I say first phase because the majority of the provisions go into effect in February 2010. But,
credit card debt
relief is starting.
This first phase of the Credit CARD Act is designed to give more notice to credit card holders that their monthly payment are coming due. Beginning today credit card companies are required to send credit card bills 21 days in advance of the payment due date. Previously, credit card companies were required to send a bill within 14 days of the due date. Now credit card holders have 7 more days notice to pay their credit card bill.
The second change going into effect today is that credit card companies must give card holders 45 days notice of significant changes to their contract. More notice is a good thing, but will people actually read the statements?
You might be asking whether a free market proponent like me approves of these types of laws. I do to the extent that they does not hurt availability to credit and individual rights.
Being pro free market does not mean that you have to believe in laissez faire economics. While I strongly believe in individual rights and liberty, there are things that government can do to increase the rights of individuals. I never want to see the principles of the right to contract freely eroded in this country, but the
credit card debt relief laws that are going into effect today do not infringe drastically on our ability to contract freely.
The practice of sending out credit card statements with a short due date is ridiculous. The only reason why credit card companies are doing this is to rack up late fees and give themselves more chances to raise credit card interest rates. Too bad credit card companies' primary goal is to not just get paid as they originally contracted. Hopefully, the Credit CARD Act will give more consumers time to pay their credit card bills on time. This is the type of credit card debt relief that I applaud.
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