How the New Credit Card Law Affects You

Laws are created to protect people as well as their interest. Through laws, policies and even simple rules and regulations, we are able to recognize our rights and privileges. We gain a feeling of security especially because we know that the government looks after our welfare.

One of the best examples of rules created to protect the interest of consumers is the new Credit Card Act. What are the provisions of this federal law? How does it influence the lives of credit consumers? And how does it protect the welfare of credit cardholders? To know the answers to these questions, we encourage you to read the succeeding paragraphs of this short article.

What is the New Credit Card Act?

The New Credit Card Act, more formally known as the New Credit Card Accountability, Responsibility , and Disclosure (CARD) Act was implemented on August 20, 2009. This law gives credit cardholders the special privilege of declining drastic changes that card issuers intend to impose on their credit card programs. Why is this important?

Well, a lot of lawmakers have observed that card companies normally adjust the rates of interest, fees and even payment terms imposed on their card programs, without providing consumers ample time to consider the effects of these changes to their finances. Card issuers do not provide their cardholders any written notices regarding the adjustments they intend to implement. And this gives them the power to manipulate the stipulations of their card programs.

However, most of these unannounced adjustments often work to the disadvantage of cardholders. After all, with higher rates and fees as well as with more stringent terms, they will surely find it more difficult to pay down their credit obligations and repair bad credit history.

So to protect consumers from the cunning activities of card companies, lawmakers decided to pass the New Credit Card Act. But how does this law protect the interest of consumers? Let us find out.

How the Law Protects You

According to the provisions of the New Credit Card Act, card issuers must provide consumers a written notice of any changes in their credit card agreements. This should be done at least 45 days before the adjustments will be formally implemented. By providing cardholders sufficient time to consider the changes in rates and terms of their credit cards they will be able to reach a sound decision whether to continue using their cards or to switch to more affordable card programs.

Consumers may also decide to enroll in free credit repair programs. Through the assistance of competent credit counselors, cardholders will be able to better understand the implications of the adjustments on their credit card programs to their financial standing. Not only that. Free credit repair sessions will also provide consumers tips, suggestions and practical advice that will help them gradually repair bad credit standing and eventually rebuild their credit profiles.

The New Credit Act also provides a considerable extension on the payment terms of existing credit obligations of consumers. Cardholders now have 21 days to settle their monthly dues without receiving threats and harassing calls from their creditors.

Aside from the provisions mentioned above, the new federal law also removes payment schedule problems. Should the payment schedules of consumers fall on weekends, they can pay their dues on the very first day of the succeeding week. They can do this without incurring additional fees and charges.

We hope that this short discussion helped you recognize some of the important aspects of the new law. And we hope that you now know how the New Credit Card Act affects the lives of cardholders and consumers like you.