Most credit card companies have been trying to find new ways to make make money because of potential hits they may take due legislation passed in May 2009. The Credit Card Accountability, Responsibility and Disclosure Act of 2009 also known as the CARD Act or CARD took effect on August 20th, 2009 and will be implemented in multiple steps with the bulk of the changes coming in February 2010. This multi-phased approach allows the credit card companies as well as consumers to prepare for the coming changes.
Some of the changes include:
- new restrictions on credit card lending
- elimination of over-the-limit fees
- 45 day notice of rate change (not required if you have a variable rate or an introductory rate)
- delivery of periodic statements 21 days before your bill is due
- elimination of due date traps (due dates on weekends or holidays, due dates that change without warning)
- no increasing interest rates for cardholders in good standing if reasons are unrelated to the cardholder's behavior with respect to that card.
- payments at local branches be credited on the same-day
According to an article in foxbusiness.com:
Lita Epstein, author of 25 books on personal finance, said lawmakers made a grave mistake by giving the card companies so much lead time between passage of the law and its implementation. To have the best effect, she said, legislators should have frozen card agreements at the time the bill was signed into law.
“By giving them an idea what restrictions were coming, they gave banks free rein to work around those restrictions -- so by the time the law is in place, the restrictions will have very little meaning,” she said.
Stay tuned as our series will explore what your options are and how you can protect yourself.