is a comprehensive credit card reform bill that was signed into law by President Obama in May 2009. The Act will become effective on February 22, 2010, and provides new protections for consumers, including:
Enhanced disclosures of credit card terms require:
- Cardholders to be given 45 days notice of any interest rate increase
- Issuers to provide disclosures upon card renewal when the card terms have changed
- Issuers to disclose the period of time and total interest it will take to pay off the card balance if only minimum monthly payments are made
- Full disclosure of payment due dates and applicable late payment penalties.
Elimination of Universal Default - credit card issuers can no longer increase the interest rate on one card if a customer missed a payment on another card.
Restrictions on Interest Rate Hikes - no interest rate increases during the first year or on existing balances.
Penalty Payments - card issuers must wait until payments are 60 days late before charging penalty interest rates.
No Fees for Payment by Phone or Online
Bills Must Be Mailed 21 days Before Due Date - no weekend or early morning deadlines.
No More Two-Cycle or Double Billing - cardholders can’t average your balances for the last two statements and charge you interest on that number.
Application of payments - credit card companies must apply any payment above the minimum to the highest interest rate balance.
Over-the-Limit Fees - these fees can only be applied if the consumer consents to over-the-limit transactions.
Age Requirements - applicants under the age of 21 must obtain a co-signer OR show they have sufficient income.
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