Rules About Paying Your Credit Card Bill That Your Creditors Don't Want You to Know

Consumers owe over $800 billion dollars in credit card debt, according to a March 2010 Federal Reserve report. That's a lot of 100 dollar bills. And navigating the ever expanding clauses, stipulations and legalese of credit card contracts can tax even most dedicated debt-reduction warrior. But there's a simpler way: work within the rules. The Credit Card Accountability, Responsibility and Disclosure Act of 2009 enforces protections against sneaky penalty fees, silent and drastic changes in interest rates and manipulation of payment dates. Credit card companies might wince a collective ouch, but for consumers who want to stay in the black and ahead of the billing cycle, using these rules can put their payments in the win column.

Interest Rate Increases

Interest rate increases can only apply to transactions that occur under the new rate.

Credit card companies used to have the power to increase your annual percentage rate at will. One month your rate floated at 10 percent, then may have mysteriously hiked to 18 percent. Today, credit card companies must give you written notice 45 days before they increase your rate. And, they have to re-evaluate the rate increase every six months. If you qualify for a rate reduction, they have 45 days from the time of the evaluation to comply. Notably, if you open a new account, they can't raise the rate during the first year.

Charging Late Fees

The credit card companies made a mint penalizing consumers for late payments. The new rule throws down a penalty flag on charging late fees and sets a cap of $25. And to sweeten the pot, the fee you pay cannot exceed your minimum monthly payment. So, if your minimum payment is $15, it can't charge more than that. Nor can it keep increasing the fee on the same transaction. One caveat: if you've had a late payment within six months this last rule doesn't apply.

Over-the-limit Charges

Sometimes you make a purchase or an emergency charge and your balance creeps over your credit limit. In days past, it didn't matter if the charge equaled the price of a tube of toothpaste. For a few dollars, you'd get hit with a hefty fine. Today, if you go over your spending limit, you're fined the exact overage amount of $10 or $15 or $200 dollars.

Permissions and Restrictions

If you didn't give the credit card company permission to allow transactions that max out your card and one or more slip through, they cannot hit you with a fee. The CARD Act rules stipulate that if you didn't agree to it, then you don't pay.

Paying Your Bill

On any given month you could have a different billing cycle, different due date and a slew of unrecognizable charges. You received a bill on the fifteenth one month and on the tenth a few months later. That's how late fees could sneak into a bill. Today, you must receive your statement at least 21 days before the due date. In addition, you have the same payment date each month. This longer billing cycle helps you pay down your debt.