Credit Card Bill 2009

CARD Act – Quick lookup

CARD Act was passed and signed as bill by Mr. Obama on May 2009 and takes effect from Jul 2010. Lets take a quick look at few important rules from the CARD act. This bill was passed in an effort to weed of bad credit practices and help consumers build their financial well being by handling credit responsibly.

Payment timing –  Credit card companies must send you a statement at least 21 days before the payment due date.

Minimum Payment – When payments are for more than the minimum amount due, the additional money must be applied first to the highest-rate balance.

Double billing – It’s no longer legal for credit card companies to charge interest twice on the same balance by collecting finance charges on current and previous balances.

Payment Protection – Process payments on the same day they are received. This also extends to payments made on or before the due date at a local branch.

Rate increases –
Credit card promotional rates must be for at least six months. In general, rates on existing balances cannot be raised unless your payment is more than 60 days late.
Card issuers can raise rates on new balances, but they now must give you 45 days notice, an increase from 15 days.

Credit limits
– Credit issuers can no longer automatically enroll you in over-the-limit protection programs that charge fees for letting you borrow more than you have been approved to borrow.

Increasing APR
– Credit issuers are prohibited from increasing annual percentage rates (APRs) that apply to existing balances unless specific conditions apply. An APR may be increased only if
1) the index on which the rate is based changes,
2) it is a promotional rate that has expired,
3) a cardholder fails to comply with a hardship workout plan,
4) the account falls 60 days past due.

Student Cards –
 Requires anyone under 21 to prove that they can repay the money before being given a card, or have a parent or guardian promise to pay off their debt if they default.

Overdraft fees
– Prohibits over-the-limit fees unless a cardholder elects to be allowed to go over a limit. CC companies need your permission before allowing you the “privilege” of spending more than your credit limit and paying a fat $39 fee for that privilege.

Detail Billing
– Required lenders to say how much time it would take and how much money in interest would be paid if only the minimum monthly payments are made.

Gift Cards
– Requires that gift cards remain valid for five years. Under the Senate’s rule, retailers and others that issue
Visa, MasterCard, American Express or Discover gift cards or certificates will have to print explicit dormancy fee information on the card. Sellers of the cards will also have to inform the buyer of the fee.

Payment Method
– Bans “pay-to-pay” fees, which are charged when someone pays the bill by phone or on the Internet.  Credit card companies are prohibited from charging a fee based on the manner in which a payment is made (e.g., on line, by telephone).

APR Issues  –
If different APRs apply to separate portions of an outstanding balance, the amount of any payment beyond the minimum payment due must be applied to the portion of the balance with the highest APR.

For a detailed list, you can check at