The newest credit card legislation to hit the country is the Credit CARD Act of 2009.
Also known as the Credit Card Accountability, Responsibility and Disclosure (CARD) Act of 2009, it was signed by
President Obama on the 22nd of May 2009. This credit card legislation contains five sections that are aimed to
limit the reign that credit card companies have been enjoying for the past several decades. According to the full
title of this credit card legislation, it aims to establish transparency and fairness through an open-ended credit
plan. It amends the Truth in Lending Act, the Fair Credit Reporting Act, the Electronic Fund Transfer Act, and the
Omnibus Appropriations Act of 2009.
This credit card legislation is, by far, the most consumer-friendly legislation to date. Not only does it protect
consumers from the unfair practices of credit card companies, it also gives them the power to control and manage
their credit cards the way they see fit.
Provisions of this credit card legislation include the protection of cardholders against arbitrary interest rate
hikes. This requires credit card companies to notify cardholders about rate increases 45 days prior. It also
prevents them from randomly changing the clauses of the contract with the so-called “any time, any reason
re-pricing” now banned. This section of the credit card legislation even gives card carriers the right to cancel
their account and pay off existing balances if they get hit by the interest hike.
Another provision from this credit card legislation prevents credit card companies from practicing "double-cycle
billing" or the act of imposing interest on a bill that’s paid on time within a grace period. It also bans them
from charging fees on the outstanding interest-only balance of a consumer who pays the bill punctually.
This credit card legislation also protects cardholders from due date gimmicks and misleading terms. It requires
credit card companies to mail credit card statements 21 calendar days prior to the due date, which should fall on
the same day every month. It also bans companies from charging late payment fees when a cardholder presents a proof
that s/he has mailed payment 7 days prior to the due date. This credit card legislation also necessitates the need
for a universal definition of terms from credit card companies to prevent confusion from cardholders.
A provision in this credit card legislation that gives cardholders power over their debt is their option to have a
fixed credit limit imposed on their card, which cannot be exceeded by any means. When a cardholder chooses this
option, companies cannot impose over-the-limit fees.
Limitations on this credit card legislation include the exclusion of business and company credit cards and
its failure to limit the rate of increase that interest rates can undergo.
Source: Credit Cards For People With Bad Credit Rating
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