With consumer lending, you have new rights under the CARD act — the Credit Card reform that Congress passed in 2009.
The most sweeping reforms ever to hit the credit card industry have been phased in over the last 1½ years.
Took effect August 2009:
Companies are required to give 45 days’ notice of major account changes, such as a higher interest rate or new fees.
Consumers have the right to reject the changes and to pay off existing balances within five years under the old terms tied to consumer lending.
Companies must mail statements 21 days before the due date.
Took effect February 2010:
No arbitrary interest rates increases.
The due date must be the same every month. If it falls on a weekend or a holiday, then it moves to the next business day.
A payment is on time if received by 5 p.m. on the due date.
No over-limit fees without your permission.
No fees allowed for payments made by phone or online, unless it’s a last-minute payment with expedited handling to avoid a late fee.
No more two-cycle billing, which involved charging interest based on a customer’s average daily balance over the past two months.
Card companies must explain how long it will take to pay off the bill, and how much it will cost in interest if only the minimum payment is made.
No marketing to college students. And no pre-screened card offers to anyone under 21 without proof of adequate income.
Companies must apply payments to the highest-rate balances first.
Companies can’t issue cards with upfront fees exceeding 25 percent of available credit.
Companies can’t raise your rate if you fall behind on payments to another creditor.
Companies can’t increase your rate on new purchases for the first year after opening a card.
Took effect August 2010
Lower late-payment fees — in most cases, not more than $25.
No inactivity fees.