Credit card relief coming

BIRMINGHAM, AL (WBRC) - People struggling with credit card debt will start to see some relief due to some new rules that are now in effect.

The "Credit Card Reform Act" is designed to give consumers more time to pay their bills and avoid late penalties. Now credit card companies will have to give you 45 days notice before making any changes to your contract, and also have to mail your bill 21 days before the due date.

Credit Counselor Doug Horst says he is seeing more people coming into his office needing help paying off credit cards, and he believes the new law is needed. "Anytime you get more opportunity to plan," said Doug Horst, "Anytime you get more notification of changes, and anytime the interest rate can no longer be raised at the drop of a hat, all those things will benefit consumers."

The new law will also give consumers the right to reject changes in their contracts, and they will have the option of paying off their balances at their existing rates within five years.  "If you are making a change in my contract and I only had 15-21 days before, and now I have 45 days and I want to dispute something that's a big difference in time, so that helps," said Horst.

Card holders agree the changes will be helpful. "I'm a proactive person," said Robert Allen, "I like to plan in advance, so it gives me a chance to plan. Hopefully, down the line I'll have more money to spend."

Even bigger changes are coming in February. Then credit card companies will only be allowed to raise interest rates on existing balances if you are more than 60 days late on a payment. Also, people under 21 will have to have a co-signer to get a credit card.