The Credit Card Accountability and Disclosure Act

The Credit Card Accountability and Disclosure Act becomes law on February 22, 2010. This law prohibits credit card companies from raising interest rates for the first year an account is opened, requires advertised promotional rates to last for a six month time period, and bans hikes on interest rates for existing balances. The banks had nine months notice before this law goes into effect.

What you also may have noticed is that some banks and credit card companies have taken advantage of this forewarning to get as much out of the credit card customer as possible. There have been interest rate hikes, closed accounts, added charges for fees and services, and some credit lines have been lowered. It is not just happening to the "bad" customers but to ones who have never once been late on a payment.

Some of these added fees for services have come from Citigroup, Chase, and Bank of America along with other credit card companies in the form of added monthly and yearly fees. Nick Bourke, manager of Safe Credit Cards Project reported, "We found there's been very slow adoption of the new safeguards that the law will require."

The last few months has been a negative experience for credit card holders as a result of banks preparing for the upcoming legislation. Interest rates have gone up for everyone. It has been difficult for small business owners to obtain credit, and those who manage their credit card debt well are paying for those who do not.

The house and senate wants to go further than The Credit Card Accountability and Disclosure Act by creating a Consumer Finance Protection Agency. The House of Representatives has voted to create this agency and it is now awaiting a vote in the Senate. They feel it is needed to hold the credit card companies accountable to the new legislation.

The credit card companies are already looking for "loopholes" in the law. Some of the things you may see happen is more credit cards with annual fees, inactivity fees if you do not charge often enough on your credit card, cut-back of reward programs, and closing of many accounts that are not considered profitable.

One thing consumers can do to protect themselves is read their credit card statement very carefully. Check for any hidden or new fees you are being charged with. If you do not understand the charge, call the credit card company and ask for an explanation. If you find the terms of the your current credit card company unfavorable, shop around for a card with a better interest rate and one that will work better for your particular circumstances.

Sources:

http://www.msnbc.msn.com/id/34730372/ns/business-consumer_news/

http://www.pewtrusts.org/our_work_detail.aspx?id=616

http://www.lowcards.com/2010/01/credit-card-predictions-for-2010.html