President Barack Obama signed the Credit Card Accountability, Responsibility and Disclosure (Credit CARD Act of 2009) into law last year on May 22. This new law around credit cards ushers in many changes, but effectively, a lot of benefits for consumers who use credit cards. The Credit CARD Act of 2009 is in place mainly to protect cardholders from some of the sneaky tricks that credit card companies like to play.
Here are some of the key points and quick facts about the Credit CARD Act of 2009:
* Without a cosigner or the means to pay, anyone younger than 21 years of age cannot apply for a credit card.
* While there is no cap on rate increases, consumers receive notification of an increase at least 45 days in advance.
* Existing balances are safe from rate increases unless they are delinquent.
* Charges for making a payment by phone or over the Internet are no longer valid. * Fees for expediting a payment are eligible, however.
* Overlimit fees are only charged when consumers authorize the creditor to approve a transaction that puts them over their limit.
* Payment allocation now goes toward paying off the highest balance first instead of the lower interest balances required previously.
* Billing statements must be sent to consumers three weeks before a payment is due instead of the previous term of two weeks.
* Gift cards now cannot expire for a minimum of five years.
For more information about the Credit CARD Act of 2009, review the official fact sheet prepared by The White House.