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How does the new Credit Card Act of 2009 affect your rewards credit card

Credit Card Accountability Responsibility and Disclosure Act of 2009 (CARD)

Sec 101 begins with the Amendment to the Truth in Lending Act (TILA) which requires credit card companies to give an advance notice of increases in interest rates, in writing, no later than 45 days prior to the effective date of the increase. This also includes any changes in fees, finance charges or other related significant change. Consumers are also given a right to cancel, and the cancellation will not constitute any type of default between the creditor and the consumer. You as the consumer are protected if you wish to cancel, due to a interest rake hike, and are not required to pay the balance up front, you can still make your minimum monthly payments.

Sec 171 states that the Credit Card Company cannot increase your interest rate on your outstanding balance, except if you were under a promotional term or plan that has an expiration date that was noted to you. For example, if you have a 6 month 0% intro apr period, and you decide to cancel your account 5 months into the intro period, due to an interest rate hike, you still have to pay interest after month 6, at the rate that was agreed on, at the time the 0% took place.

Sec 171 b(4) States that if you make late payments that cause your credit card terms to go into default, the credit card company can raise your interest rate, for a period of no longer than 6 months, so long as you are paying your payments on time.

Sec 172(a) States that as long as you are making your payments on time, and do not default on any of the agreements between you and the credit card company, they cannot increase your interest rate for the first year since the card was opened.

Credit card companies are not allow to charge you an over limit fee, if you are assessed a fee that puts your card over the limit in the first place. The CC Companies are only allowed to charge 1 over limit fee per billing cycle and for only 2 consecutive cycles as long as the consumer hasn’t asked for an increase in credit limit and went over that credit line as well.

Credit card companies are not allowed to charge fees as a result of delayed payments received from the changing of their mailing address, office location, or handling procedures within 60 days of the change.

Your credit card payment date cannot change by law. For example a 28 day billing cycle in Feb would cause your payment to be due 3 days earlier, this law gets rid of that. Also, if your payment due date falls on a holiday, payments received the day after, cannot be counted as late.

There is much more to the CARD 2009 which you can read here

Disclaimer: This interpretation of the CARD 2009 is not intended for legal advice and for educational use only, I am not a lawyer, and the interpretations are based on my own opinions, will not be held responsible for any errors, omissions or inaccuracies published.

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  1. Michael

    I do understand what you have on website. But what about 29.9 percent of interest rate that is so high rate. should I go ahead to close account. I really don’t like that idea and I have no reason to cause if I had been payment on time most of the time. what should I do? what is your suggest idea of way better work for me ? Thanks

  2. admin

    I would call the credit card company and ask for a lower interest rate, state to them that you have always paid on time and you have good credit. 29.9 is usually a rate for someone that has missed payments or is over their limit.

    If they won’t agree to a lower limit, ask to speak to a supervisor. If you have made late payments, your success rate will be lower.

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