Posted on June 30, 2009 by creditanswers
We have previously discussed the Responsibility and Disclosure (CARD) Act. This set of provisions has recently merged with the Credit Cardholders’ Bill of Rights. On May 22, President Obama officially signed the CARD Act and the new regulations will take effect in February 2010. This set of laws is a major milestone for the credit card industry and may be instrumental in ending deceptive practices that affect consumers. Below is a brief outline of some of the changes that will take place under the CARD Act.
What Will Change?
According to the Center for Responsible Lending, a non-profit research organization, the following new laws are definite and may benefit consumers.
Applicants under the age of 21 will not be able to get approved for a credit card unless they obtain a co-signer or show they have sufficient income.
Creditors will be required to give cardholder’s 45 days notice before changing rates. After a new account is opened, rates will not be able to be increased during the first 12 months. Promotional rates must last six months. Card companies can still raise rates in the event of delinquencies, but must lower the rates if the cardholder stays current for a period of six months.
Bills must be mailed at least 21 days before the due date rather than the current 14 days. Early morning deadlines will also be banned.
Over-the-limit fees can only be applied if the consumer consents to over-the-limit transactions.
Card companies must apply payments above the minimum payment to the highest interest rate balance.
Filed under: debt, debt management | Tagged: c.a.r.d act, credit card bill of rights, credit card changes, credit card industry, credit cards, debt credit cards
