Credit Card Act 2009
Please see the following pages to learn more about the Credit Card Act 2009 and deceptive lending practices.
Officially referred to as the Credit Card Accountability Responsibility & Disclosure Act of 2009, the Credit Card Act 2009 was signed into law by President Barack Obama in an effort to protect credit card holders from unfair and unethical practices that have been committed by many lending institutions in an effort to increase their own profits. Highly supported by Democrats and Republicans alike, the Credit Card Act 2009 went into effect in February 2010 and has been deemed the "Credit Cardholder's Bill of Rights."
Provisions of the Credit Card Act 2009
The Credit Card Act 2009 has a number of provisions that regulate how and when lending institutions (i.e. banks and credit card companies) can charge various fees and alter interest rates. Some of the most major provisions include that credit card companies:
- Cannot arbitrarily raise interest rates – They must give a 45-day notice, provide a customer the chance of pay off the balance, and are unable to increase interest rates on good-standing accounts.
- Are not allowed to penalize customers who pay their account(s) on time – Lending institutions may not charge interest rates during "grace periods" and they are legally obligated to return raised interest rates to their original rate if a cardholder has paid on-time for six consecutive months.
- Are not allowed to create unreasonable due dates – They must notify cardholders 21 days before the due date, accept payments on the due date until 5 p.m. as on time, provide contact information (phone number, Web site, email address, etc.) on each bill, and move any billing due date to the next business day (if the date falls on a legal holiday or weekend – meaning a bill can never be due on these days).
- Are forbidden from using intentionally misleading terms – Credit card companies must define all the terms they use and they must provide their applications with a minimum font in order to promote readability and comprehension of their contracts.
The Credit Card Act 2009 also prevents credit card companies from opening up lines of credit for those under 21 (unless they have a co-signor older than 21) and from marketing credit cards at college campuses with the promise of free goods in exchange for an individual opening a credit card.
Downfalls of the Credit Card Act of 2009
Despite such massive reforms, however, some critics argue that the Act fails to set a limit on how high lending institutions can set interest rates, as well as failing to cover business and corporate accounts. Additionally, some point out that these regulations have actually triggered some credit card companies to increase their interest rates and fees, while significantly lowering some borrowers' credit limits, in an effort to circumvent these new regulations.
Have You Been Wronged by a Bank or Other Credit Card Company?
If you believe a credit card company has violated any of the new provisions set forth by the Credit Card Act 2009, you may wish to speak with a lawyer about your rights. Contact our consumer fraud attorney for more information about the new credit card regulations today.