For the longest time, any one can practically get a credit card. Even those with horrible credit scores can receive cards in their mail, activate the cards for yet another chance to bury themselves more in more debt. And banks and card companies really don’t care since they do eventually make money for people’s use of credit cards.
But with new legislation and the impact of the financial crisis, banks are now getting picky on who to ship out cards to and they’re now basing their decisions on people’s credit worthiness. Not only that, those who are interested in availing the cards have to present documentation and deal with higher fees and rates.
The new law – the Credit Card Act of 2009 – restricts banks and card companies from changing their rates and prevent any hidden fees by making sure that users are informed of everything that’s being charged to them.
These are all good for the users since, by next year, banks are required to mail out statements 21 days before the due date and inform users of changes in the terms 45 days before they take effect.
Because of these, banks are now tightening their issuance to those who can deal with the cost of using credit cards.
Source: WSJ
