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Credit Card Interest Rates

For decades, credit card companies have been trying to maximize their profits by creating arbitrary interest rates and adding confusing language to cardholders' contracts. However, as of February 2010, lending institutions are required to comply with new terms for charging and changing credit card fees, as laid out in the Credit Card Accountability Responsibility & Disclosure Act of 2009 (also known as Credit Card Act 2009).

New Regulations Enacted by the Credit Card Act 2009

Passed into law in May 2009, the Credit Card Act 2009 has more than 10 major provisions that significantly change the way that credit card companies are legally allowed to perform business. Some of these new regulations state that cardholders have the right to:

  • Not be subject to arbitrary interest rate changes
  • Not be penalized by fees or interest rate changes if their account is in good standing
  • Be protected from confusing jargon and fine print so that their contracts are easy to read and comprehensible
  • Not be subject to misleading terms, meaning that credit card companies must clearly define any terms they use in their contracts
  • Set their own credit limits
  • Additional protection if they are under 21 or are a particular vulnerable customer
  • Not be subject to excessive fees
  • A complete explanation of the terms and conditions of "minimum payment“ options

Some people criticize these new regulations, complaining that they are not comprehensive enough. Despite strong support from both Democrats and Republicans in Congress, critics of the Credit Card Act 2009 point out that the Act fails to set a maximum limit to how high lending institutions can set interest rates, along with failing to apply to corporate or business lines of credit.

Additionally, some have highlighted the fact that the Act has caused a backlash in which credit card companies preemptively raised certain fees and lowered some credit limits in expectation of the enactment of these new regulations.

Speak to a Consumer Fraud Lawyer

If you feel that you've been a victim of unfair interest rates, or if you would like more information about the Credit Card Act 2009, contact our consumer fraud lawyers. You may be entitled to financial compensation, so contact us to find out of you qualify to file a consumer fraud lawsuit today.