Cardholders’ Bill of Rights: Who Complies?

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Mon, Aug 17 - 10:43 am EDT | 5 years ago by
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Earlier this year, the Credit CARD Act of 2009 was signed into law. While many of the “cardholders’ bill of rights” provisions in the law do not take effect until February 2010, there are two that actually take effect later this week:

  1. Credit card statements must be mailed 21 days before the bill is due (instead of the current 14 days).
  2. APR changes must be given to the customer 45 days in advance.

As you might guess, a rash of increased credit card fees and rising interest rates has been seen as issuers scramble to make sure they can get what they can.

The rest of the changes (including an end to universal default and double billing, as well as provisions to pay balances with the highest rates first) will have to wait. Unless you are with some of the credit card issuers that are adopting the new rules early — or have had them in place for years. BillShrink offers a rather helpful illustration of which credit card issuers are doing what with regard to the cardholders’ bill of rights:

cardholder bill of right

While most credit card issuers are unlikely to start applying payments to the highest rate balances until they absolutely have to, it is possible for you to find credit cards without universal default and double billing. For those who are working on a credit card debt reduction plan, these burdens can be quite difficult to bear; having them removed should be helpful.

For those who do not carry balances on their credit cards, this legislation will have very little effect. After all, if you pay off your credit card every month, none of these are issues that really affect you. But it is nice to have a credit card that does keep its interest rates low and doesn’t engage in questionable billing practices. After all, you never know when your situation might change and you may need to carry a balance.

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  • The Biz of Life

    I have to admit I have not been paying much attention to this issue. My position has always been if you can’t pay your credit card off in full every month, you shouldn’t have one and should learn to live without one. Just feed it through the wood chipper or paper shredder, and be done with it. You don’t need the temptation.

  • Jerry Nordstrom

    The politicians did not enact this law immediately on purpose, giving banks the opportunity to increase fees and interest rates dramatically before Feb 22.

    Since many of these banks are now either bailed out by, run by and owned by the U.S Government, it makes sense they allowed them the time to ramp up fees and juice up their profits. Last quarter our Government touted the recovery has started and pointed to all the major banks who showed stronger than expected earnings. Yes, on the backs of many borrowers – tax payers, not from honest earnings and a stronger economy.

    What has not changed.
    Usury laws will still allow businesses to apply the interest rate limits from the state they do business in, to all consumers regardless of the state they live in. Citibank will still operate out of North Dakota and charge ungodly interest rates and fees.

    Credit card companies are moving to a new ARM credit card. You got it, no more fixed rate. It will change according to an index they decide on. Not likely to be the fed exchange rate. Ha.

    Credit Card Companies are now charging consumers with cards who do NOT carry a balance. Yes, so even if you pay in full each month you could incur a $20 fee for no activity.

    Credit card companies are going back to the membership fee model. Remember the days you had to pay a $50 yearly fee? They are back.

    Credit card companies are eliminating or reducing “perks”. In short take any perk you have and cut it in half. If you used to earn an airline mile per dollar charged, now it’s a mile for $2. Many have increased the # of miles needed for a free ticket as well. Discover has reduced its “cash back” percentages as well.

    Its time for Americans to reject the concept of using high interest rate instruments like credit cards, pay day loans, cash advances, car loans and more. Now is the time to get out of debt, eliminate your credit cards, and instead of paying a credit card bill, start investing in yourself. America should be an investor nation, not a debtor nation.

    Just my opinion.

  • Pingback: Watch Out for New Credit Card Fees : Yielding Wealth - Personal Finance Tips – Money Management Advice

  • Miranda Marquit

    You make a good point that there is still plenty that credit card companies can do. And you are right that it is time to reduce our debt and change our spending habits. I agree that a change in priorities is needed if we are to be financially secure as individuals, and if we are to wean our economy away from debt fueled consumer spending.