Credit Blog > New Credit CARD Act Provisions; Will Your Credit Cards Be Affected?

New Credit CARD Act Provisions; Will Your Credit Cards Be Affected?

August 17, 2009 By

The Credit CARD Act of 2009 and YOUR Credit CardsBack in May, President Obama signed into law the Credit CARD Act of 2009, officially known as the Credit Card Accountability Responsibility and Disclosure Act of 2009. It’s a pretty big deal and will likely affect your credit cards one way or another.

The Credit CARD Act includes several provisions, most of which will go into effect in February. However, the first of the consumer protection provisions will go into affect just three days from now on August 20, 2009. What you can expect?

According to the Federal Reserve Board:

Creditors must provide consumers 45 days written notice before increasing the annual percentage rate (APR) on a credit card account or making significant changes to the terms of an account. The written notice must also inform the consumer of the right to cancel the credit card  before the increase goes into effect.

If your credit card company increases your APR, it must let you know in the form of a written notice 45 days prior to the rate increase, up from the current 15-day advanced notice. You have the right to close your credit card account if you do not agree with the increased interest rate. In cases where a credit card carries an introductory rate which expires or a variable interest rate, this notice is not required.

Creditors must mail monthly or periodic bill statements for credit cards and other open-end consumer credit accounts at least 21 days before the payment due date.

Open-end credit accounts include credit cards and home equity lines of credit accessed by a credit card.

In sum, the benefit to consumers to start is more time. In the case of an APR increase, you’ll have more time to determine if you agree with the change and whether you’d like to hang on to the credit card, higher rate and all. You’ll also have more time from when you receive your credit card bill in the mail to the date your bill is due, so you’re sure to have the chance to mail your payment in.

This is just the beginning. There’s a lot more in store for February 22, 2010, when the bulk of the law will go into effect. Be sure to check back with the Quizzle Blog, as we’ll be reporting on what’s ahead for your credit cards.

Quizzle.com is the easiest way to get a complete understanding of your credit. Visit Quizzle.com to get your free credit report and score. No credit card or social security number necessary!

Filed Under: Credit Cards Tagged With: , , , , , , , , , , , , , , , ,
  • http://www.matchmybudget.com Jerry Nordstrom

    The politicians did not enact this law immediately non purpose, giving banks the opportunity to increase fees, interest rates dramatically before Feb 22. Since many of these banks are now either bailed out by, run by and owned by the U.S Government, it makes sense they allowed them the time to ramp up fees and juice up their profits. Last quarter our Government touted the recovery has started and all the major banks showed stronger than expected earnings. Yes, on the backs of many borrowers and tax payers, not from honest earnings and positive growth.

    Here is what’s not changed.
    Usury laws will still allow businesses to apply the interest rate limits from the state they do business in, to all consumers regardless of the state they live in. Citibank will still operate out of North Dakota and charge ungodly interest rates and fees.

    Credit card companies are moving to a new ARM credit card. You got it, no more fixed rate. It will change according to an index they decide on. Not likely to be the fed exchange rate. Ha.

    Credit Card Companies are now charging consumers with cards who do NOT carry a balance. Yes, so even if you pay in full each month you could incur a $20 fee for no activity.

    Credit card companies are going back to the membership fee model. Remember the days you had to pay a $50 yearly fee? They are back.

    Credit card companies are eliminating or reducing “perks” in short take any perk and cut it in half. If you used to earn an airline mile per dollar charged, now it’s a mile for $2. Many have increased the # of miles needed for a free ticket as well. Discover has reduced its “cash back” percentages as well.

    Its time for Americans to reject the concept of using high interest rate instruments like credit cards, pay day loans, cash advances, car loans and more. Now is the time to get out of debt, eliminate your credit cards, and instead of paying a credit card bill, start investing in yourself. America should be an investor nation, not a debtor nation. Just my opinion.

  • http://www.creditlaw.com Paula: CreditLaw.com

    Thankfully, this will buy consumers more time. No, it’s not perfect and frankly consumers should try to ween themselves off of debt. At the end of the day… consumers borrow money from credit card companies, but those companies take advantage. Consumers must protect themselves.

  • http://www.healthclubhut.com Brian

    Well this is a hard one to figure out… Ultimately don’t spend what you don’t have right? Yet people can’t seem to live with this notion. So they go and borrow and rates they know they have to repay at, yet they somehow figure tomorrow will bring windfalls of cash and everything will be ok. Who’s fault is it? The Creditors or the Borrowers?