If you are like many people in Davidson, and throughout Tennessee, then you likely have at least one credit card. As a credit card consumer, the federal Credit Card Accountability, Responsibility, and Disclosure Act, also known as the Credit CARD Act, provides you certain protections. This law, which was signed into effect in May of 2009, was created in response to the need for reform in the credit card market.
In the past, some credit card companies employed practices that took advantage of consumers like you. Additionally, there was a significant lack of transparency with regards to the rates and fees associated with certain credit cards. According to the Consumer Financial Protection Bureau, the Credit CARD Act has two primary purposes. The first is to eliminate abusive and unfair practices. This includes letting you go over your card’s allowed limit and then charging you an over limit fee, as well as raising the rate on one of your existing card’s balance. Furthermore, the Credit CARD Act is also aimed at making the fees and rates on credit cards more transparent. This is in an effort to make it easier for you, the consumer, to understand how much you are paying for your cards.
In order to meet these goals, the Credit CARD Act establishes a number of rules for credit card companies, including establishing certain notice and disclosure requirements. As such, your credit card company must give you at least 45 days notice of any important changes to your card’s terms and conditions. This includes increasing your APR, fees or finance charges. Additionally, your statement is now required to show how much you have to pay each month in order to pay off your existing balance and interest in 36 months. With few exceptions, your credit card company is no longer permitted to increase your APR within one year of your account being opened.
This post has provided an overview of the Credit CARD Act. It is important to remember, however, that there are unique terms associated with various credit cards. As such, you should consider this only as general information, and not take it as legal advice.