The media is all over the news that the Senate passed the Credit Card Accountability, Responsibility and Disclosure Act.  Now it goes to the House and the President wants it on his desk within days.

So what's in it for you?  That remains to be seen as the House version has some differences and the negotiations are underway for final language in the bill.

Some key points that may be included are:

Retroactive Rate Hikes
Existing balances on credit card accounts have to stay at the same interest rate even if the rate on the card changes.  The new rate would only apply to balances from that point on.

Advance Notification
Changes from a 15 day notice to a required 45 day notice from the account issuer for significant interest rate, fee and finance charge increases.

Payment Allocation
Credit card companies usually take consumer payments and apply them to the lowest interest rate balance on the account.  This bill would have any payment in excess of the minimum due be applied to the highest rate balance first, then other balances in descending order of interest rate.

Promotional Rates
Any introductory interest rates must be offered for at least six months.

Due Dates
Credit card statements must be mailed 21 days before the bill is due, an increase from the current 14 days.  Holiday and weekend due dates must be extended to the following business day.

Over-the-Limit fees
If you charge above your credit limit, the issuer approves the transaction and adds on an “over-the-limit” fee.  This bill states that consumers must opt in for over-the-limit approval and associated fees.

Universal Default
Both versions of the bill eliminate this practice, which allows a card issuer to raise interest rates if you have late payments on other accounts with other companies or have other negative information on your credit report.

Penalty Periods
If you have a late payment and your interest rate goes up, the Senate bill states that you can reclaim the lower rate by paying your bill on time every month for 6 months.

Account Closings
The House bill requires a credit card issuer give you 30 days notice before it closes your account. 

Cards for Young Adults
The House bill wants no cards issued to un-emancipated minors under the age of 18 unless a parent is the account holder. It places limits on college students to just one credit card, sets credit limits to a percentage of the student’s income and requires parents to approve increases to credit limits on joint accounts.
The Senate bill wants to totally eliminate credit cards for people under the age of 21 unless an adult co-signs or they can show proof of income.

Gift Cards
The Senate bill states that gift cards cannot expire in less than five years. Retailers selling Visa, MasterCard, American Express or Discover-branded gift cards will be required to print information about dormancy fees directly on the cards.

WHEN WILL IT TAKE EFFECT?
The Senate bill is supposed to take effect nine months after passage; the House bill twelve months.  So even though there is a lot of attention to this legislation as it works its way through the process, it does not mean immediate relief for consumers who are faced with major account reductions, interest rate hikes, and closed accounts with notice after the fact.

ONE FINAL NOTE
Many of the items included in these bills have already been approved by the Fed and are scheduled to take effect in July 2010.  See the complete article from last December here.

Stay proactive with your credit monitoring, pay all your bills on time to help keep your good credit.  If a credit card gets closed or the credit limit reduced, call the company and ask if it can be reinstated.  Sometimes the automated process they use includes consumers that shouldn't be included and some people are actually getting their account reopened and/or their limits increased or restored.