With an exciting and attention grabbing name as titled above, how can you ignore the Senate’s Credit Card Accountability Responsibility and Disclosure Act of 2009? (Also known as The Credit C.A.R.D Act of 2009. I know, super original).
“But wait, BillShrink Guy,” you ask, “Didn’t the Fed just pass new credit card regulation last year? And didn’t the House just pass a credit card Bill of Rights last month? What’s with all these different laws and regulations? My head hurts, and I just want my credit card to be nice to me.”
I’m glad you asked that question, and like you, I just want my credit card to play nice too.
The Credit CARD Act of 2009 brings stronger protection to the table for all of us. Here’s a clear-cut list of additional changes the just-passed Senate bill provides:
Interest rate increase protection. A card’s Interest rate can no longer be raised on a cardholder unless the account is 60 days late. The increased rate will have to be restored to the previous level if a cardholder pays on time for six months. An interest rate cannot be increased within the first 12 months, and promotional rates must be a minimum of 6 months.
Advance notice of term changes. Credit card companies will now have to notify customers with a 45 days advance notice of any significant changes to the terms of their credit card, this now includes changes to benefits such as reward structures.
Limiting credit cards to younger adults. The legislation bans credit cards for people under the age of 21 unless they have an adult co-signer or show proof that they have the means to repay the debt. College students will be required to receive permission from parents or guardians to increase credit limit on joint accounts they hold with those adults.
Reduction on gift card hidden fees. Gift cards are now required to remain active for at least five years from the day of activation. Dormancy or inactivity fees on gift cards can no longer be imposed unless there has been no activity in a 12-month period. The dormancy fee has to be disclosed clearly to gift card buyers.
Proper notification of bill and processing of payments. Credit card companies must send your bill out no later than 21 days before the due date. Payment must be credited as on-time if payment is received by 5 P.M. on the due date.
The Senate’s Credit CARD Act of 2009 will now most likely be consolidated along with the House’s Credit Cardholder’s Bill of Rights Act of 2009 and be signed into law by President Obama before the Memorial Day congressional recess. If there’s any major changes to the credit card reform in the near future, you can be sure a detailed update will appear on your friendly neighorhood money blog, Shrinkage is Good!