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On May 22, 2009 President Obama signed the Credit Card Accountability, Responsibility, and Disclosure (CARD) Act of 2009. The act is aimed at protecting consumers from unfair and deceptive credit card practices.
President Obama stated, "With this new law, consumers will have the strong and reliable protections they deserve. We will continue to press for reform that is built on transparency, accountability, and mutual responsibility — values fundamental to the new foundation we seek to build for our economy"
Parts of the law go into effect as early as August 20, 2009, with most of the legislation going into effect in February 2010
Answer a few questions about your credit card usage and BillShrink will find the credit card that matches you best.
Find the right card...receive better protection from arbitrary rate increases through early notification and longer promotional periods.Read more
...have their APRs reviewed every 6 months to see if a reduction in rates is warranted.Read more
...have their payments applied to their most expensive balances first.Read more
...be protected from the dangers of universal default, a practice where issuers increase interest rates for customers who miss a payment on separate, unrelated account.Read more
...no longer be subjected to double-billing, a practice that hurts cardholders who fully pay off balances some months but not others.Read more
...not have to pay extra fees for paying credit card bills by phone, mail, or online.Read more
...have their payment credited as on-time if it is made by 5 P.M. EST on the payment due date.Read more
...have at least 21 days, from the date the statement is mailed, to make a paymentRead more
...receive quarterly statements from issuers explaining the dangers of only paying the minimum balanceRead more
...if under 21 years of age, be better protected from aggressive credit card marketing and from taking on credit cards that they cannot afford.Read more
Credit card companies are now required to provide cardholders with a minimum 45-day notice on any interest rate increase, allowing consumers enough time to consider their options. Additionally, most promotional APRs will be required to last for a minimum of 6 months.
Issuers that meet this requirement:
American Express,
Bank of America,
Citi,
Discover,
First Premier Bank,
Pentagon Federal Credit Union,
Wells Fargo
Issuers are required to review APRs of all accounts every 6 months to see if a reduction in APR is warranted.
Issuers that meet this requirement:
Bank of America,
Chase,
U.S. Bank
While in the past, most credit card companies applied payments towards balances with lower interest rates first, the new legislation will force them to put that payment towards balances with higher interest rates. This will ensure that cardholders who make their payments on time will be in a position to pay the least amount of interest.
Issuers that meet this requirement:
None yet
Drawing on credit reports from other issuers, credit card companies used to be able to raise interest rates to the default rate if the cardholder defaulted on another credit card. Now, they can only focus on the cardholder's payment record concerning their particular card.
Issuers that meet this requirement:
American Express,
Capital One,
Citi,
Discover,
First National Bank of Omaha,
First Premier Bank,
Iberia Bank,
Orchard Bank,
Pentagon Federal Credit Union,
Simmons,
Wells Fargo
Double-cycle billing allows for credit card companies to compute finance charges based on more than one billing cycle. Thus cardholders are penalized for carrying a balance in past months even if they paid off their balance in the most recent month. Credit card companies will now be prohibited from using this double-cycle billing practice.
Issuers that meet this requirement:
American Express,
Bank of America,
Capital One,
Chase,
Citi,
Discover,
First National Bank of Omaha,
First Premier Bank,
Iberia Bank,
Pentagon Federal Credit Union,
Simmons,
U.S. Bank,
Wells Fargo
Many credit card companies currently charge a $5-15 surcharge if a payment is made over the phone instead of online or by mail. This part of the legislation ensures that, when using regular processing service, there will be no such fees. However, issuers will still be able to charge for expedited service via phone or mail.
Issuers that meet this requirement:
American Express,
Chase,
Discover
Payments made by a cardholder by 5 P.M. EST on the due date would be considered on time, and protect consumers from unnecessary late payment fees and possible interest rate increases.
Issuers that meet this requirement:
Bank of America,
Capital One,
Citi,
Discover,
First National Bank of Omaha,
Pentagon Federal Credit Union,
Simmons,
U.S. Bank,
Wells Fargo
Currently, credit card companies give 14 days between statement notification and the payment due date — this time period is often known as the "grace period." Now, issuers will have to give 21 days for cardholders to make on-time payments.
Issuers that meet this requirement:
American Express,
Capital One,
Chase,
Citi,
Discover,
First National Bank of Omaha,
First Premier Bank,
Iberia Bank,
Orchard Bank,
Pentagon Federal Credit Union,
Simmons,
U.S. Bank,
Wells Fargo
Currently, issuers do not educate cardholders that how they pay off their balances (i.e. minimum balance vs. full balance) affects their financial standing in the long run. The new laws would require quarterly reports that disclose the time and interest costs to pay off credit card balances, if the consumer only pays the required minimum.
Issuers that meet this requirement:
None yet
In the past, young cardholders were drawn into attractive introductory offers only to find that they are unable to pay off their bills. Now those under 21 can only get a credit card in two ways: (1) have a qualified co-signer, or (2) prove they have the ability to repay their credit card. In addition, issuers will no longer be able to offer tangible gifts on college campuses. Finally, issuers offering college-specific cards will have to report their contracts with universities regularly for federal government review.
Issuers that meet this requirement:
Orchard Bank
