New credit card rules have a downside for consumers

Rates may rise as companies try to recoup their losses.



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New regulations that clarify billing practices for credit card consumers may result in higher interest rates, according to the Globe and Mail.

Rules come into effect in Canada on Wednesday that force credit card companies to provide a 21-day grace period from interest on new charges, even if the previous month’s balance wasn’t paid off in full. And when a payment is made, it must be applied to the portion of debt that is being charged the highest interest rate.

In the U.S., tougher regulations are resulting in higher credit card interest rates, and it looks like the same may happen in Canada, as companies try to recoup their losses.

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