Credit CARD Act of 2009
Credit card contracts and statements can be tricky. Many consumers feel that credit card companies take advantage of their business and entrap cardholders into paying fees and higher interest rates than they originally expected. Fortunately, Congress stepped up in 2009 to help rectify this grave problem with the credit card industry. They passed a law known as the Credit CARD Act of 2009, which provides a new level of protection to cardholders against deceitful business practices. The Greenway Law Firm would like to inform you of some of the new protections included in this law.
Protections for Cardholders
Under the Credit CARD Act, credit card companies must now be much more transparent with their business practices. They must also provide cardholders with more information on billing statements and notify consumers well in advance of any changes made to their contracts. Some of the new protections that could have a great impact on cardholders include:
- Credit card companies must inform cardholders of interest rate increases at least 45 days in advance. The cardholder can then decide whether to accept the new interest rate or terminate the contract, paying the remainder of the balance at the current interest rate and payment schedule.
- If the company increases a cardholder’s interest rate and the cardholder pays his or her bills on time for the next six months, the company must reduce the interest rate back to the rate before the increase.
- Instead of automatically being charged for going over your credit card limit, your card will now be denied unless you approve the transaction and agree to pay the over-limit fee.
- Credit card bills must be mailed out at least 21 days before the due date (The previous limit was 14 days).
- On the monthly billing statement, the company must disclose how long it will take the cardholder to pay off the card and how much she or he will ultimately pay in interest and principal if he or she makes only the minimum payment each month.
The Credit CARD Act includes many additional protections not listed here that are designed to help consumers avoid excessive debt and penalties. Unfortunately, many people were trapped by credit card debt long before this act went into effect and are facing the possibility of bankruptcy. While no one wants to have to file for bankruptcy, it can be a useful tool to restart your finances and work towards a more secure financial future.
If you or someone you love is burdened with credit card debt and is considering bankruptcy, don’t hesitate to contact the Birmingham bankruptcy lawyers of GREENWAY BANKRUPTCY LAW, LLC today at (205) 324-4000.