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What's in the Credit Card Act 2009?

Credit Companies Will Feel the Pinch from February 2010

Oct 23, 2009 Natalia Jones

Millions of people get into credit card debt every year. Hopefully the new CARD 2009 will help to decrease those numbers and make credit cards easier to manage.

The Credit Card Accountability, Responsibility and Disclosure Act 2009 is going to be enacted in February 2010 and it seems that credit card companies are using the rest of 2009 to see just how much they can circumvent the new law.

To know exactly what to look out for, check out the terms of the CARD Act 2009 below. There are several great changes that will have an impact on the way cards are managed.

The New Act Serves a Heavy Dose of Consumer Protection

Credit card companies will not be able to charge over the limit fees unless customers opt to allow them to. This has to be checked off on the initial agreement form.
No more retroactive increases either, unless the cardholder is more than 60 days late on a payment.
Card companies must review the card holder's account and if payment has reverted to being on time, the interest rate must be lowered to previous levels.
Card companies must also change the way principal payments are applied. Previously, customers with several different interest levels would have had the payment applied to the balance with the lowest interest, but the new law states that the payment must be applied to the highest interest. This will make a big difference to people struggling to pay down large balances.

Protection of the Young is High on the Agenda for CARD 2009

18 year olds will no longer be able to get a card on their own strength. Single card holders will need to be at least 21 from February 2010.
College students will also have to get consent from parents or guardians to up the limits on existing cards.

Consumer Disclosures from Credit Card Companies… Really?

Absolutely! From 2009 credit companies will not be able to yank reward points without notice, or make changes to the terms of use without giving cardholders 45 days notice. That includes interest rate increases.
Possibly taking a tip from tobacco companies printing blackened lungs on cigarette packs, credit card statements under the new law must disclose the total interest payable if only minimum payments are made. They will also be required to show how long it will take to pay off the balance if only the minimum payment is made.

This is good news for all credit card users, but the credit card companies are not about to roll over and sacrifice their exorbitant profits. Watch carefully for the loopholes.

The law has been rewritten for consumer protection. It is now on the credit card holder to take responsibility for properly using credit to avoid slipping into troubled waters.

The copyright of the article What's in the Credit Card Act 2009? in Consumer Education is owned by Natalia Jones. Permission to republish What's in the Credit Card Act 2009? in print or online must be granted by the author in writing.

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