The New Credit Card Act

I am sure many of you have seen one if not all of the following things occur regarding your credits cards:
1. interest rate
2. unfair fee
3. decrease in credit line

These changes were probably made without any notification and have negatively affected your credit scores. Credit card companies have been in control making the consumer feel ineffective at managing their credit.

To make matters worse it was reported that credit card providers collect around $15 billion in penalty fees each year!


There could be some good news.

The Credit Card Accountability, Responsibility and Disclosure Act of 2009
( aka The Credit Card Act)
Signed into law on May 22, 2009. Provides some of the most proactive credit card consumer legislation in 60 years. "The Act" is important and anyone who has a credit card should understand it's basic principles.

There are 2 key provisions:

1. Until August 19, 2009 consumers were only given 15 days notice of their interest rate change. Now, they must alert you 45 days prior to any change. This gives you the chance to call your credit card company and offer an explanation for the whatever situation may have arose. Try and renegotiate your interest rate. If they won't budge, take your business elsewhere.

2. Card holders will now have 21 days instead of 14 to make their payments. This is a huge plus for consumers who are fighting to keep on top of their bills and those who travel a lot.

The most significant portions of the law go into effect on February 22, 2010. Here are some details:

No unfair changes-
Credit card issuers will not be able to change your credit status at anytime, for any reason. If you miss a payment with one creditor, another cannot automatically increase your interest rate or drop your credit limit, which can often affect your credit scores.

Restrictions under 21 years of age-
Consumers under the age of 21 will need a co-signer or a job in order to get a credit card. This will help limit the number of young, college age card holders.

Over-limit Fee Control-
Card holders will no longer be able to exceed their limit without having the card holder's permission to do so. If you have not agreed to allow over-limit exceptions, your card will be declined thus saving your credit score.

Late fees-
If your credit card provider charges late fees, they must clearly disclose them on your monthly statement.

Credit Card Agreements-
Creditors will now be required to have a copy of your credit agreement for you on a website.


As we have seen it is crucial to actively mange and monitor your credit profile to ensure you are fully aware of any changes.