5/22/2009

Proposed New Canadian Credit Card Legislation

An article published on cbc.ca covers the 9 new proposals, regarding canadian credit cards. Some of the highlights of the changes are below, I have tried to extract these from the article itself.

1. The main change would be the mandated minimum 21-day interest-free grace period on all new transactions when consumers pay their balance in full by the due date. Currently, there is no mandatory grace period.

2. The new regulations would require card issuers to clearly display information about grace periods and interest rates in a summary box on bills.

3. The regulations would require bills to give a clear indication of how long it would take people to pay off their balances in full if they only made the minimum payments every month.

4. Card issuers would be required to give advance notice if interest rates were going to increase during the next payment period, and consumers would be informed in advance if a rate was set to expire or if a penalty for missed payments was to be imposed.

5. Card issuers would also be forbidden from increasing credit limits without expressed written consent of cardholders.

6. The new rules would require payments on outstanding balances to be allocated "in a way that is advantageous to consumers," Flaherty said.

7. The federal government also moved to prohibit over-the-limit fees solely arising from holds placed by merchants,

8. It would place limits on debt collection practices that financial institutions use in contacting a consumer to collect on a debt.

9. Financial institutions would no longer be allowed to contact customers outside specific hours on weekdays and weekends, for example, Flaherty said.

Do you think this will help or hinder the current economic situation. Comments left on the article from the link provided above seem to be torn between the two.
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