Westchester County

Protections for Credit, Debit, ATM and Gift Cards

New credit card regulations have been in effect since February. New regulations relating to debit cards and gift cards go into effect in July and August, 2010, respectively.

Remember, these cards are not the same. Be aware of the differences – and use them responsibly.

Credit card changes (effective February)

Card issuers must notify you 45 days in advance about changes in your interest rate and provide to you information on how long it will take to pay off your existing balance.

  • For the first year you have your credit card, if you pay your bills on time, the interest rate can’t be increased unless the card was a “variable rate” one or it had a special introductory rate. However rates may increase if you are 60 days or more late in paying your credit card bill or you have failed to comply with an agreed to credit card payment plan.
  • If your interest rate changes, the new increased rate applies only to new charges. Your old interest rate applies to existing charges.
  • Over-the-limit transactions (and the accompanying fees) can only happen if you have told your card issuer to allow them. Otherwise the transaction will be rejected.
  • To obtain a credit card if you are under age 21, you need to show you can make the payments or have someone over 21 as a co-signer on the account.

Debit and ATM card changes (effective July 1, 2010)

  • You may not be charged overdraft fees or able to exceed the amount of your available cash unless you gave your bank permission in advance.
  • After Aug. 15 on existing accounts, your transaction will be denied for a purchase or an ATM withdrawal if you went over your limit unless you asked your bank for overdraft protection.
  • After July 1, with new accounts, you can’t be charged overdraft fees unless you opt for overdraft protection (and you can opt out of the protection at any time).
  • The new overdraft rules apply only to debit or ATM card use. They do not apply to overdrawn checks and automatic bill payments.

Retail and gift card users (effective Aug. 22, 2010)

  • Inactivity and service fees can’t be charged to a card unless the card hasn’t been used for a year.
  • Only one type of fee can be charged per month; and only after a year of inactivity (Types of fees are: inactivity fees, service fees, balance inquiry fees, etc.)
  • Consumers must be given clear disclosure about any fees.
  • Cards can’t have an expiration date of less than 5 years after the card was purchased or the last time it was “reloaded” with funds.