The Credit Card Act of 2009 (H.R. 627) has a new set of rules for credit card issuers with annual fees, rewards program, interest rate hikes, and issuing cards to minors. Most of the major changes will take effect on February 22nd as outlined by the Federal Reserve.
Top Credit Card Act Rules
- Interest rate cannot be raised within the first year unless it’s an end of introductory rate, variable rate tied to the LIBOR, or more than 60 days late on a payment.
- Existing balances cannot be retroactively apply rate increase.
- Monthly statement due dates must be the same day every month.
- Minimum payment requirements cannot be raised without notification.
- Issuers can raise interest rate with 45 days advanced notice and customers can opt out.
- Any amount over the minimum payment due will go to the highest interest rate balance first.
- Double cycle billing and Universal default are not permitted.
- The over-limit must be opt in, likewise cardholder can opt out anytime.
- Issuers cannot charge extra fees for paying their bill and statements must be 21 days before due date.
If issuers make a change to your card agreement, you have the right to opt out. If you do opt out, issuers can have cardholder repay the balance over 5 years and keep the same payment as before.
Rules for Minor/College Students
- You must be 21 to get a credit card. If not, you must get co-signers or prove source of income to repay the debt.
- College or alumni association’s deals with credit card marketers must be transparent to the Federal Reserve Board.
- Credit card companies cannot come within 1,000 yards from campus.
Gift Card Rules
- Prepaid cards, gift cards and certificates are good for at least 5 years unless stated otherwise.
- No more dormancy or inactivity fees unless clearly stated.
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