Credit Card Act of 2009 - A Primer to Basic Consumer Protections

Services for Real Estate Pros with Credit Restoration Consultants

Original content by William E. Lewis, Jr.

In an ideal world, one would not worry about the recession, high unemployment rates, the foreclosure epidemic and the never ending debt load carried by the average American. In what has been commonly referred to as the "Year of the Consumer," 2010 has a lot to offer in the way of federally mandated "changes" as it relates to the credit card industry.

With less than 30 days until enactment of The Credit Card Accountability, Responsibility and Disclosure Act of 2009 creditors and financial institutions are doing their very best at circumventing the new law, also known by its short title - The Credit Card Act of 2009. Are you aware of your rights and protections under the new law?

There are several positive changes that will have an impact on how each and every American utilizes their credit cards, debit cards - even their gift card.

Consumer Protection

· Retroactive and/or retrospective interest rate increases will be banned except when a cardholder is more than 60 days delinquent in paying a credit card bill.

· A credit card issuer must review the cardholder's account six months after increasing the interest rate and return the annual percentage rate to the prior lower level if the all payments have been submitted on time.

· An interest rate cannot be increased within the first 12 months of account existence and promotional rates must have a minimum of 6 months in duration.

· An advance notice of 45 days must be provided to the cardholder prior to significant changes in credit card terms and conditions. This includes any reward or benefit structure of a credit card.

· The practice commonly known as universal default and double-cycle billing are no longer allowed.

· Bills must be sent out no later than 21 days before the due date.

· Payments cardholder makes must be credited as on time if the payment is received by 5 P.M. on the due date. All due dates that occur on a weekend or holiday are extended until the next business day.

• All over limit fees are now prohibited unless the cardholder specifically opts to allow processing of a transaction rather than being denied at a point of sale.

Enhanced Consumer Disclosures

· A clear disclosure on how long it would take to pay off a credit card balance if cardholder makes only the minimum payment each month must be provided.

· A clear disclosure on the total cost of interest and principal payments if a cardholder makes only the minimum payment each month must be provided.

• Any late payment deadline and/or postmark due date are required to be clearly shown and provided to cardholders.

Protection of Young Consumers

· Credit cards can no longer be issued to individuals under the age of 21 unless they have an adult co-signer or show proof that they have the means to repay the debt through a reasonable income.

· All college students will be required to receive permission from parents and/or guardians to increase a credit limit on joint accounts they hold with those individuals.

• Individuals under the age of 21 will now be protected from pre-screened credit card offers unless they specifically opt-in for said offers.

Gift Cards

· Gift cards are now required to remain active for at least five years from the day of their initial activation.

· Dormancy or inactivity fees may no longer be imposed on gift cards unless there has been no activity in a 12-month period.

· Dormancy or inactivity fees must be clearly disclosed to gift card buyers upon purchase.

• Should a gift card expires after 5 years, the terms of expiration must be clearly disclosed to gift card buyers upon purchase.

The majority of the new rules under the Credit Card Act of 2009 will be take effect 9 months after the signing of the bill, which - in this instance - puts the effective date as February 22, 2010. The remaining provisions will become effective on August 22, 2010.

William E. Lewis, Jr., is a credit repair expert and host of "The Credit Report with Bill Lewis" on AM 1470 WWNN, a daily forum for business and financial news, politics, economic trends, and cutting edge issues. The Credit Report is brought to you by Credit Restoration Consultants - the leading credit restoration firm in South Florida. If you are having credit problems, if your bills are out of hand, or if you just want a credit check up, call CRC at (954) 581-5050 or visit them online at

Comments (4)

Ross Quintana
Real E Smarter - Spokane, WA
Real E Smarter Real Estate Coach - 509-362-1966

This is a great post and some much needed changes. I still don't understand why gift cards would ever expire, That seems like a scam. If you buy them with cash they should always be good and interest rates should not go up because you miss payments on the money you borrowed, if they want ot increase it only on future money borrowed that makes sense.

Jan 06, 2010 03:11 AM
Lori Isaacson
Credit Restoration Consultants - Plantation, FL

There is much that does not make sense....At least there are some changes being made to help protect the consumer!!

Happy Wednesday!!


Jan 06, 2010 03:19 AM
Jim Frimmer
HomeSmart Realty West - San Diego, CA
Realtor & CDPE, Mission Valley specialist

Lori – I see this is your most recent post. Hope you are really busy and that all is well with you and yours.

Jun 06, 2011 08:16 AM
Not a real person
San Diego, CA

Happy Hump Day!

Jul 27, 2011 05:03 AM