New rules considered for changes in credit card terms

Credit card reform: The fine print of proposed changes to Regulation Z

By Connie Prater

As with the account opening disclosures, there currently are few format requirements for change-in-terms disclosures. Thus consumers generally discover them in notices, amendments or pamphlets seemingly written by a legal whiz but undecipherable to average readers. That will end under the proposals.  If the change in terms is one that must be provided in a table in the account-opening summary, it must be provided in a table in any notice of a change in terms. Creditors can also give notice of change-in-terms on your periodic or monthly billing statements, but again, in a table. 

45 days' notice Fixed rates APR disclosures Fee disclosures Account opening disclosures Periodic statement disclosures Changes in credit card terms Minimum payments Subprime credit cards

Says Ann McElligott and Bruce Braunstein of Portland, Ore.: "They changed the due date on our credit card. We did not realize this as we always paid online. As a result, we 'paid late.' " Read more

Citigroup says it announced the end of "any time, any reason" changes in terms for Citi-branded consumer accounts in March 2007: "We are going the extra mile to protect our customers against surprise changes in the rates, fees and other terms of their credit card accounts. We hope others in the industry follow our example ... " Read more (Page 2)

Citigroup proposed the Fed prohibit changes in terms for at least one year after a new account is opened. "We believe that changes in terms in the early stages of the account cycle surprise the consumer unfairly ... " Read more (Page 14)

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Published: December 26, 2007

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