New Credit Card Regulations

Finance Minister Jim Flaherty on Thursday, May 21st, announced new credit card regulations aimed at protecting consumers, including a minimum 21-day interest-free grace period on new purchases and clearer bills.

However, the minister stopped short of introducing caps on interest rates or retailer transaction fees, raising the ire of merchant coalitions.

The new grace period, which Mr. Flaherty said banks resisted, would cost banks “tens of millions of dollars”. It means purchases made the month after a balance has been carried forward will not be charged interest. Consumers must pay in full by the end of the month to take advantage.

Other measures include limits on how banks can contact cardholders with outstanding balances and obtaining mandatory consent before raising credit limits. Credit card bills will also need to specify the implications of only paying the minimum amount, and advance notice of any rate changes.

For the complete Financial Post article, click here.