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New Credit Card Law Effective Tomorrow (Monday, February 22)

By Brian Wolfman

The Credit CARD Act -- which stands for the Credit Card Accountability, Responsibility and Disclosure Act of 20009 -- goes into effect tomorrow, Monday, February 22, 2010, one year after its enactment. Among other
things, it enacts these key changes (call them "reforms" if you like them, and "deforms" if you don't):

1 - It generally bans "universal default" -- that is, companies cannot raise rates on one credit card account (or all of a consumer's other accounts) just because the consumer was late or missed a payment on another, separate account.

2 - Generally, promotional (so-called "teaser") rates must last at least 6 months.

3 - Generally, credit card companies cannot charge fees for charging over the card's credit limit.  (Of course, watch for increases in rates or other fees to make up for this loss of revenue.)

4 - Billing statements will disclose penalties for late payments and warn about other ramifications of delinquency (such as higher interest rates).

5 - Significant new restrictions on credit card companies' right to market to and contract with people under age 21 (including adults between ages 18 and 21).

Today's Washington Post has a series of articles on the new law, all linkable from here.

Full post as published by CL&P Blog on February 21, 2010 (boomark / email).