The Credit CARD Act of 2009
Posted in: Credit Cards
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Key elements of the CARD Act
President Barack Obama signed the Credit Card Accountability Responsibility and Disclosure Act of 2009 (Credit CARD Act of 2009) into law on May 22, 2009.
Under the Credit CARD Act of 2009, a number of new guidelines and regulations govern how credit card companies interact with credit card holders no various different levels. Some of the most notable new regulations deal with how and when a credit card company can increase interest rates.
Interest Rates
Under the Credit CARD Act of 2009, credit card companies:
- Must notify consumers at least 45 days in advance of any interest rate increases.
- Are required to apply payments to balances with highest interest rates first (before applying payments to balances tied to lower interest rates).
- Cannot impose universal default interest rate increases on consumers.
- Are restricted from engaging in double-cycle billing methods.
Along with taking aim at how credit card companies handle interest rate increases, the Credit CARD Act also looks to restrict other credit card industry practices that have been considered unfair to consumers in the past.
Fees and Billing Methods
In addition to the above list, the Credit CARD Act of 2009 also attempts to:
- Decrease the likelihood of overlimit fees by making it more difficult for transactions that would invoke these fees to take place without permission of the cardholder.
- Lower the occurrence of late fees by requiring credit card companies to mail statements to cardholders at least 21 days before the date that payment is due.
- Limit fees on subprime (i.e. “bad credit”) cards and also on various prepaid card products.
Overall, the Credit CARD act aims to rid the industry of unfair practices and create more balance between credit card companies and credit card users. We’ll follow news surrounding the Credit CARD Act closely, so check back frequently for updates.
Continuing CARD Act coverage
- Government continues with credit card rules (Published November 1, 2010)
- Fed proposes additional credit card rules (Published October 19, 2010)
- The CARD Act and potenital new credit card fees (Published September 17, 2010)
- CARD Act’s final provisions take hold as third stage in effect (Published August 31, 2010)
- Final stage of CARD Act takes effect (Published August 23, 2010)
- Future effects of the CARD Act (Published July 19, 2010)
- What to know about the CARD Act and business credit cards (Published July 9, 2010)
- CARD Act: You might get a longer time period to pay your bill (Published June 10, 2010)
- Five things you may not know about the CARD Act (Published June 7, 2010)
- CARD Act: No more payment-method fees (Published May 21, 2010)
- The 5 most important elements of the CARD Act (Published April 19, 2010)
- Consumer advocate: Fed should take further action on credit card rates (Published April 15, 2010)
- Gift card regulations, credit score disclosures on the way through the Credit CARD Act (Published March 31, 2010)
- New regulations for interest rates and fees suggested by Fed (Published March 10, 2010)
- Credit card issuers face new regulations as a result of the Credit CARD Act (Published February 26, 2010)
- 5 important benefits of the CARD Act (Published February 22, 2010)
- New credit card laws for 2010 (Published February 22, 2010)
- Issuers add fees in order to make up lost income from CARD Act (Published )
- Inactivity fee: A new credit card fee? (Published December 21, 2009)
- Credit card rule changes for August 2009 (Published August 21, 2009)
2 Responses to “The Credit CARD Act of 2009”
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December 24th, 2009 at 11:32 am -
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December 31st, 2009 at 4:42 pm
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