The Credit Card Accountability Responsibility and Disclosure Act of 2009 (CARD Act) implemented new rules for credit card companies. In doing so, the CARD Act provided several protections for credit card owners and applicants - particularly with regard to interest rate increases and credit card fees.
Since 2009, the Consumer Financial Protection Bureau (CFPB) estimates that the CARD Act has reduced credit card fees by more than $16 billion and decreased the average late fee from $35 to $27. It also has saved many credit card holders from harmful issuer practices such as over-limit fees and "repricing" accounts.
What are the specific consumer protections covered by the CARD Act? Below is a list of notable creditor requirements:
- Limits on fees, interest rate hikes and billing
- Fewer surprise interest rate increases - banning hikes within the first year and prohibiting increases to current balances
- Limits on late fees - currently capped at $27 for the first late fee and $38 for subsequent fees
- Opt-in required for over-limit fees
- Restrictions on low-limit, high-cost cards marketed to borrowers with bad credit
- Better billing practices - Bills delivered at least 21 days before due date
- More transparent disclosures on credit card statements
- Warnings regarding how long it will take and how much it would cost to pay back debt by only paying the minimum due
- Clear disclosures on statements about due dates, late fees and penalties
- Card protections for young people
- Limits on college campus marketing, particularly "freebies" for opening an account
- Age restrictions - Prohibits issuing cards to those under 21 unless they have independent income or a co-signer
- Limits for gift cards and non-reloadable prepaid cards
- Restricts how issuers can levy service charges and inactivity fees
- Prohibits expiration dates, with certain exceptions
If a credit card issuer violates the rules of the CARD Act, you have the right to hold them accountable by filing a complaint with the CFPB. You also may want to consider hiring an attorney who specializes in helping with consumer protection and credit card debt.