The New Credit Card Act and What It Means To You
You’ve most likely heard about the new law regarding credit card changes.
The Credit Card Accountability Responsibility Disclosure Act of 2009 (CARD Act) limits changes for interest rates, fees, and other significant terms on credit card accounts. It also requires a longer notice when certain terms are changed, bans certain deceptive practices, and provides additional protection to consumers.
Read below to understand how the law will affect your credit cards.
- 45 Days Notice
Issuers must give written notice at least 45 days before increasing the annual percentage rate (APR). Notices must contain a brief statement about the cardholder’s right to cancel the account.
- Increase in APR
No increase in APR allowed in the first year that account is opened unless certain exceptions apply (for example, an introductory rate has ended).
- Teaser Rates
No “teaser” rates for less than six months.
- Penalty Rate
No penalty rate unless 60 days overdue.
What this means to you: Your rate is more protected than before. Glendale Area Schools Credit Union already adheres to all these policies for our credit cards.
- Late Fees
Late fees cannot be charged if card issuer delays crediting payments.
- Over-The-Limit Fees
Consumers must “opt in” to over-the-limit fees; those who “opt out” may have transactions rejected if they exceed their credit limits. The Glendale Area Schools Credit Union does not charge over-the-limit fees.
- Payment Fees
Issuers are prohibited from charging fees for consumers paying by mail, electronic transfer, or phone—unless live services are required.
What this means to you: Most nuisance fees you’ve seen on card statements will disappear. Glendale Area Schools Credit Union does not charge late fees if we delay crediting your payment or charge you depending on the method you make your payment. We do not charge an over-the-limit fee, but any transaction that would cause you to exceed your credit limit will be declined.
- Statement Mailing
Credit card issuers must mail statements 21 days before due date.
- Payment Due Date
Payment due date must be the same each month; if the due date falls when issuer is closed (weekends, holidays), creditor can’t treat payment received the next business day as late.
What this means to you: Clearer due dates and times. You’ll have more time to pay your bill and won’t have to worry about unreasonable deadlines. Glendale Area Schools Credit Union currently adheres to all these policies.
Young adults (younger than age 21)
- New Cards
Cards can’t be issued without an adult co-signer unless cardholder can prove means to repay the debt.
- Increasing Credit Limits
Credit limits can’t be increased without considering the ability of the borrower to make required payments.
Card issuers are not allowed to offer tangible items or inducement for applications on or near campus and at college-sponsored events.
What this means to you: If you’re younger than age 21 you’ll need a co-signer if you want a credit card unless you have a steady source of income.
- Notice of Changes
Issuers must give written notice at least 45 days before a significant change in terms of credit card account agreements. Notices must contain a brief statement about the cardholder’s right to cancel the account.
- Minimum Monthly Payments
Issuers must disclose consequences of making only minimum monthly payments—how much interest you will pay and how long it will take to pay off card.
- Toll-Free Number
Toll-free number available for help in locating credit counseling and debt management services.
What this means to you: It will now be easier to compare terms of credit card issuers and manage your finances. Glendale Area Schools Credit Union credit card statements will have a new look to accommodate the features above.
According to the New York Times, credit union cards are a great example to show how other cards will perform under the new law—because they already operate in the consumers’ best interest. At Glendale Area Schools Credit Union, we conform to the new rules and at the same time offer you low credit card rates and valuable benefits at no extra cost.
If you have questions about your Glendale Area Schools Credit Union credit card or the new Credit Card Act, please contact us at 800.844.5363 or email us at firstname.lastname@example.org