The Senate voted today, 90-5, in favor of the Credit Card Accountability, Responsibility and Disclosure (CARD) Act of 2009—an effort to crack down on dubious credit card industry practices that make it easy to charge consumers outrageous interest rates and make it harder to get out of debt. Now, the Senate must merge their proposed changes to the credit card industry with the similar Credit Cardholders’ Bill of Rights Act of 2009 that the House of Representatives passed in April 357-70. If the bills can be successfully joined, President Obama is expected to sign the bill into law this week.
What will these changes mean for you?
The major stipulations in the Senate’s Credit Card Accountability, Responsibility and Disclosure (CARD) Act of 2009 are:
- Credit card companies cannot increase interest rates on existing credit card balances unless a customer is at least 60 days late.
- In the event of an interest rate increase, the credit card company must revert to the original rate after the customer makes six months of on-time payments.
- Credit card companies must give customers at least 45 days notice of any other interest rate hikes.
- Billing statements must be mailed 21 days prior to the due date, and companies cannot charge a late fee if a payment is late due to a delay in processing.
- A credit card company cannot raise interest rates in the first year of a customer relationship, and promotional interest rates must last at least six months.
- Creditors must adhere to new regulations that will make it more difficult to issue credit cards to consumers under 21
On the upside, the the Credit Card Accountability, Responsibility and Disclosure (CARD) Act of 2009 means your credit card companies won’t be able to charge you outrageous interest rates for an indefinite period of time if you’re a day late just once. Similarly, they won’t be able to hike your rates on existing balances arbitrarily.
These changes are all positive and long overdue, but I’m interested to watch and see how the credit card companies respond to them. I wouldn’t be surprised if we see credit card companies continue to clamp down on credit lines and credit card rewards, and I wonder if credit cards will start adding annual fees to cards that have otherwise been free.
What do you think? Will the CARD act help? Is it too little, too late, or will the credit card companies just find new ways to screw us?