Credit card holders can circle February 22 on their calendar as the day when new consumer protections laid out in the Credit Card Accountability Responsibility and Disclosure Act of 2009 kicked in. Better Business Bureau of Southern Arizona explains what these new consumer protections mean to cardholders across the US.
The US Census Bureau predicts that in 2010, the number of US credit card holders will grow to 181 million. Unfortunately, almost 75 percent of cardholders admit to not reading the terms and conditions of their credit cards, according to a CreditCards.com survey. Your BBB recommends that all card holders familiarize themselves with the fine print and review the new provisions set out by the Credit CARD Act of 2009.
“Credit card debt can mount when times are tight and consumers need to take the time to understand the fine print of their credit card agreements and the different fees and penalties that can chisel away at the family finances,” said Kim States, BBB President. “While the new CARD Act provides more consumer protections, card holders still need to keep an eye on changes to their accounts and respond quickly if they aren’t satisfied.”
Following are just a few of the new credit card regulations and consumer protections as a result of the Credit CARD Act:
- More Notice for New Interest Rate Changes. Card issuers must give card holders 45-days advance notice in the event of an interest rate change. Additionally, promotional rates must apply for at least six months and, unless disclosed up front, card holders cannot have their rate increased in the first year.
- Cardholder Opt-Out. If there are significant changes made to the terms of the account, card holders can choose to reject those changes and will have five years to pay off the balance under the original terms.
- Older Age Restrictions Added. Card issuers are no longer allowed to issue a credit card to anyone under 21 unless they can prove they have the means to repay debt or if an adult over 21 co-signs on the account. Credit card companies also face new restrictions on how they can (more…)