What is the Credit Card Act of 2009?

The Credit Card Act of 2009 is a federal law that protects the welfare of credit card holders in the United States. Also known as the Credit Card Accountability, Responsibility and Disclosure Act (CARD), this decree offers many advantages to the American consumers in their various credit card transactions.

Protection Against Rate Increase

One of the major provisions of the Credit Card Act of 2009 is the issue on unreasonable interest rate increases applied by credit card issuers to consumers who paid their obligations late. The CARD prohibits this practice, as well as the imposition of rate increase on the outstanding balance for the reason of a "universal default." The law also states that credit card companies must fully disclose the details and terms of the credit card contract when a consumer opens a new account.

Protection Against Unfair Fees

The other most important features of the Credit Card Act is the exorbitant system of charging fees into the accounts of credit card holders. The Act strictly prohibits the credit card issuers to:

  • charge fees on consumers who did not pay their debts on time
  • charge fees on sub-prime
  • the practice of "double-cycle" billing wherein the credit card companies estimate charges on interest rates for the current month based on the consumer's remaining balance from the last month

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