Credit Cardholders’ Bill of Rights Act of 2009

Bill of Rights Act of 2009 is expected to be signed into law today and will take affect in approximately nine months.What is included in the bill? How can this effect you?

Boston Globe provided a huge list of changes from the bill that I’m using for this post. I wanted to highlight and organize a few of the changes they listed.

Credit Card Bill of Rights: Some Highlights

Existing Credit Card Balances and Payments

• Creditors are required to send credit card statements at least 21 days before the due date of the outstanding balance.
• With certain exceptions, credit card issuers are prohibited from charging a finance charge based on the double billing cycle method.

The 21 day rule can help some people to avoid late payments. If you’re really looking for an easy way to keep your payments in time, online bill pay is usally free with many banks and credit unions.

Double billing cycle is a horrible method of getting billed. Since this law does not go into effect immediately, if your card has a double billing cycle, then consider paying it off and/or switching credit cards as soon as you can.

Credit Card Interest Rates and Grace Periods

• In the first 12 months of opening a new account, credit card companies can’t increase the annual percentage rate (APR).
• Creditors are required to provide consumers with a 45-day advance notice of changes in rates and significant contract changes.
• Interest rate promotions must be in effect for at least six months from the beginning date of that promotion.

I like that the law says credit card companies can not yank away a teaser rate without notification.

Credit Card Account Provisions

• Creditors are prohibited from providing credit cards to consumers under age 18 (some exceptions).
• Credit card companies are prohibited from opening a credit card account for any college student who does not have any verifiable annual gross income.
• Creditors are prohibited from charging a fee to make telephone and web-based payments. However, a fee may be charged for expedited telephone payments made on the due date or the day before the due date.

I didn’t know underage teenagers were getting credit cards without an adult cosigning.

My first credit card company gave me $1,000 credit line (which quickly jumped up), when I wasn’t even making $700/month in college. I understand they want to get customers loyal as soon as possible, but no income customers are going to be bad customers.

I’m really happy about this due to personal experience with my first credit card. They had a habit of charging a $14.95 convenience fee for phone payments.

• Are There Loopholes in the Credit Card Act?
• The Credit Cardholders’ Bill of Rights: What Does It Mean For You?
• Credit Cardholders‘ Bill of Rights Act of 2009
• Changing Credit: Highlights of the Senate Credit-Card Bill
• What the New Credit Card Rules Mean for You
• The Credit Cardholders‘ Bill of Rights Act of 2009

Photo Credit:  rubenerd

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