Details of the New Credit Card Bill
President Obama recently signed the Credit Card Accountability, Responsibility, and Disclosure (CARD) Act, which will protect credit card customers from outrageous fees and skyrocketing interest rates.
The CARD Act is designed to take control of out-of-control credit card practices that have left many credit card customers in over their head and unable to find their way out.
The CARD Act, which takes effect on July 1, 2010, will regulate the practices of many credit card companies of raising interest rates and imposing fees that have left many cardholders simply unable to reasonably repay their debts.
Highlights of the New Credit Card Bill
Within the guidelines of the new credit card bill, a creditor may only raise a cardholder’s interest rate after he or she has been more than 60 days delinquent. The creditor must then reinstate the cardholder’s original interest rate after he or she has made payments on time for six months.
Another positive feature of the CARD Act is that creditors may not raise a cardholder’s interest rate during the first year on a new or existing account unless the interest rate is variable, or if the cardholder fails to make a payment within 60 days of the due date.
Other features of the bill include: limiting over-the-limit fees; providing cardholders with a reasonable amount of time to make a payment; putting any monies which exceed the minimum payment toward the higher interest debt on the same credit card; eliminating two-cycle billing; and providing cardholders with a 45-day notice of a interest rate increase.
The CARD Act is a positive law for trustworthy, responsible credit card holders who consistently pay their bills on time.
Most of us have been in a situation where we missed the due date for a credit card or fell on bad luck and were not able to make a payment by the due date. With old credit card practices, most creditors would automatically raise our interest rates dramatically, thereby causing many of us to simply be unable to pay down our credit card debt.
The CARD Act will protect responsible credit card holders and enable consumers to be better equipped to handle their credit card debt and pay it off in a reasonable amount of time.
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