Credit Card Act of 2009 - Were you aware there was one?!
Credit card debt is one of the reasons a lot of us get into trouble with our finances and our credit scores! This summer the Credit Card Accountability, Responsibility, and Disclosure Act of 2009, (CARD) was signed into law. The effective date will be February 2010, (just around the corner). Here is a breakdown of what the law says:
Over credit limit fees will be prohibited, unless consumers specifically agree to allow the transaction to go through, (those can get pretty pricey).
No more late fee traps! Institutions will have to give card holders a reasonable time to pay their bill, at least 21 days. No more weekend deadlines or due dates that change each month or any deadlines that fall in the middle of the day.
Retroactive interest rate increases are banned. No more rate increases on existing balances due to any time, any reason or a universal default. It also restricts rate increases unless the payment is more than 60 days late, (good, interest rate increases hurt!).
Plain Language in Plain Sight Disclosures must identify how long it would take to pay off the balance if only the minimum payment is paid, (trust me, you would be shocked!). Clear disclosures will be required on the total cost in interest and principal payments if a cardholder makes only the minimum payment for 36 months, (more life altering aha moments!). Did you know that with a balance of only $50.00, if you pay a minimum of 10 dollars each month with an interest rate of %12 it could take you 6 MONTHS to pay that off?! Click HERE for some handy calculators.
College students will be required to receive permission from parents or guardians in order to increase credit limit on joint accounts they hold with those adults, (yeah mom and dad, no more of those surprises!)
People under the age of 21 will be protected from pre screened credit card offers, (very good news!). This is where the trouble with those pesky credit cards start!
For more detailed information on the CARD Act of 2009, click HERE. Perhaps with this ACT, more Americans will find it easier to get out of debt, or better yet, not get into debt at all.
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