New Rights For Credit Card Holders Start Today

New Rights For Credit Card Holders Start Today


Beginning today, consumers have new rights under the Credit Card Accountability Responsibility and Disclosure Act. New rules designed to protect consumers are being rolled out in steps with full changes taking place in February 2010.

Among the new provisions taking effect today are the following:

  • New consumer credit rules kick in today.

    New consumer credit rules kick in today.

    Credit card issuers are required to adopt reasonable procedures designed to ensure that consumers’ statements are mailed or delivered at least 21 days prior to the payment due date and the date on which any grace period expires;

  • The penalty for failing to send cardholders their statements in sufficient time such that the creditor cannot treat a payment as late nor collect any finance charges or late fees on that payment;
  • Credit card issuers are required to give at least 45 days advance written notice of significant changes related to a dozen specific account terms, including raising the interest rate, increasing the required minimum monthly payment, imposing or increasing an annual fee, and changing fees for cash advances, late payments, and over-the-limit situations.
  • This advance notice must also advise the cardholder, that in most cases, he or she can reject the changes, and that the account may be deactivated thereafter.

Despite these changes, consumers should be aware that credit card issuers are free to respond, perhaps in ways not previously imagined including:

  • Banks are free to come up with new fees which they only must disclose before they are imposed. This means that you could be charged an annual fee for your card if you haven’t been charged one in the past.
  • No additional notice is required when a low-rate offer or zero-percent rate financing offer is about to expire, as long as the new higher rate was originally disclosed to the consumer.
  • No additional notice is required when the interest rate on a variable-rate account is raised, if the change triggered by a change in the index used as a basis of setting the rate.
  • No advance notice is required when a credit card issuer lowers a consumer’s credit limit (in most instances).

Open End Credit Plans Impacted Too

While the new consumer laws are intended to apply to credit card accounts chiefly, some provisions of the new law are also applicable to open end credit plans such as home-equity lines of credit.

The next phase of changes to the law takes effect on February 22, 2010.  Those provisions are related to interest rate increases, over-the-limit transactions, student credit cards, and other matters.

Consumers need to stay up on these changes especially any fees that may mysteriously show up on their monthly statements. Expect to challenge anything that seems awry or hasn’t been made fully understood.

Source: Massachusetts Office of Consumer Affairs & Business Regulation (OCABR)

Adv. — Are you looking to refinance your home? Interest rates haven’t been this low in years! If you have very good or excellent credit, you could find a home loan with an interest rate of about 5% for a fixed rate, thirty-year mortgage.  Visit for more information!


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Categories: Credit Cards

About Author

Matthew C. Keegan

Matt Keegan is a freelance writer and editor as well as publisher of "Matt's Musings", his personal blog. Matt covers campus, consumer, business and financial topics on various websites and blogs, and has been published in the "Houston Chronicle", "Sam's Club Magazine" and "Wisconsin Golfer".