The following are critical elements to the Credit Card Reform Act:

• The act banned unfair rate increases
• Any time, any reason and universal default have been banned.
• First year protection states the contract terms must be spelled out and the terms must be stable for one year. Therefore, promotional rates can still be offered as long as the terms are completely outlined.
• Late fee traps are ended in which a card holder is given at least 21 calendar days from the time they receive the bill to make a payment. The due dates of the bill cannot be changed. Deadlines must be appropriately set.
• Fair interest calculations are required to reduce the highest interest balance from being paid last.
• An opt in choice for over limit transactions and therefore a fee associated with that.
• Subprime fees are limited in order to provide fair fees for low credit scores.

The above is not a complete listing of what has been changed, but they are the most important issues the reform act was created for. The advantages are clear. The reform is stopping practices that have been unfair such as hiking your interest rate based on your credit card score or one missed payment. The act requires there to be a reason for a rate hike such as a continual pattern of late or missed payments before the credit card company may take action.

You do not have to wonder about the due date of your credit card bill. It will be the same day every month. Should that date be a Sunday you will not be charged for the processing on a Monday, as long as you are within the time limit of the deadline. Credit card companies can now set a deadline in the evening on the date the bill is due. For example, BarclayCard has a deadline of 7pm eastern standard time. Any payment set up on the due date after this time is considered late. There is no negotiating this issue.

Most products and services have disadvantages. Whether they are slight or not is up to the user. We have mentioned one disadvantage of the new rules. Since credit card companies have been told they must have an appropriate deadline they are no longer willing to negotiate no matter who you are. Even if you have never had a late payment on a ten year old credit card account, if you are past the deadline on the due date you will be charged a $25 fee. This fee has not been lowered since the reform. The reform has approved that a late payment fee of $25 is an acceptable amount and therefore it is not unfair. It has also stated that credit card companies may charge more if there is more than one late payment within a six month period.

Promotional rates are still offered through credit card companies and though a clear English explanation is required, little has changed regarding how these rates are handled.

As long as the consumer pays their monthly minimum payment on time each month the promotional rate will remain intact. However, a failure to make one payment on time will result in the promotional rate being dropped and a potential interest rate increase. The consumer would be charged their regular annual percentage rate. Given the clear explanations sent out and required by the reform there is no negotiating with the credit card company since they now have a clear breach of contract terms to show should you miss a payment, make a late payment, or make any other mistake with the account.