The Credit Card Bill of Rights (or the CARD Act) designed to protect credit card holders went into effect in February. If you have a credit card, these new rules may impact you. Some of the highlights include:
- Card issuers must consider the borrower’s ability to repay before issuing the card.
- Statements must be sent no less than 21 days before the due date.
- Cardholders are given 45 days notice before their interest rate is increased or any other major changes are made.
- Interest rates cannot be raised on existing balances unless the cardholder is 60 days late in payment.
- After a rate increase, if the cardholder pays on time for 6 months, the original rate must be restored by the company.
- Payments received by 5:00 pm on the due date will be considered on-time.
- Interest rates cannot be increased within the first 12 months of an account, and promotional rates must last for at least 6 months.
- Over credit limit fees are now prohibited unless agreed upon by the cardholder.
- Cardholders will be given clear disclosure on how long it will take to pay off a balance if minimum payments are made.
- They will also be told the total interest costs if making minimum payments.
- No double-billing cycles.
- No fees related to the method of payment (mail, phone, electronic transfer, etc).
- Card issuers are prohibited from giving cards to people under the age of 21 unless they can prove they have the means to repay the debt, or a parent or guardian co-signs.
Let me know if you have any questions about these new rules by posting a comment to this blog or sending me an email. I’ll do my best to get you answers as soon as possible.
