New Credit Card Regulations Provide Protection

The application of the new regulations will relate specifically to those credit cards issued by banking institutions that are federally regulated. Regulations that came into effect earlier this year provided information to credit card customers related to interest rates and applicable fees, consent requirement for increases to credit limits and changes to debt collection practices. In addition to the interest free grace period, the new regulations will provide additional information to consumers through the following changes:

• A breakdown of the time it would take to fully pay off outstanding debt if only the minimum monthly payment is made
• Disclosure of all interest rate increases in advance to the credit card customer
• Payment allocation would be changed to benefit the cardholder

Minister Flaherty advised that the change in regulations would "make financial products more transparent for consumersî and "will protect Canadians and their families from unexpected costs.î