Credit Card
Act of 2009
Your
Questions Answered
You've likely heard about the credit card act that President
Barack Obama signed into law but do you know how it works
and how it will effect you?
As a credit union member you already know that credit union
credit cards feature low rates, low fees and reasonable
grace periods. You can rest assured knowing Heartland does
not participate in the deceptive practices that led to this
law, but understanding how some of the components of the law
may effect you is important. To help you understand this
legislation we've put together an explanation and timeline
of changes.
What is the purpose of the act?
The Credit Card Accountability Disclosure Act of 2009 (Card
Act) was created to protect consumers from abusive credit
card practices. The credit 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 and bans certain deceptive practices.
Change Timeline
As of August 20, 2009
As of February 22, 2010
-
"Teaser" rates must be in effect for at least six months.
-
The
APR on new purchases cannot be increased in the first year,
excluding expiring teaser rates.
-
Rate
cannot be increased on an existing balance unless payment is more
than 60 days overdue.
-
Late
fees cannot be charged if the card issuer delays crediting payments.
-
Consumers
must "opt in" to over-the-limit fees.
-
You cannot be
charged a fee for paying by mail, electronic transfer or phone - unless live
services are required.
-
Payment due date
must remain the same each month; if the due date falls when the credit card
issuer is closed (weekends, holidays) payments received the next business
day cannot be considered late.
-
Cards can't be
issued without an adult co-signer unless the cardholder can prove means to
repay the debt.
-
Tangible items
or inducement to sign-up for a credit card on or near campus and at
college-sponsored events is not allowed.
-
Issuers must
disclose how much interest you will pay and how long it will take to pay off
the card if you only make the minimum payment.
-
Issuers cannot
practice "universal rate" - which means raising your rate if they learn that
you were late on another account.
These are just some
of the key mandates that will occur in the upcoming year. We encourage you to
ask questions and evaluate the credit cards you currently use and how these
changes will effect your accounts.
If you have any
questions about your Heartland Credit Card please contact us at (651) 451-5160
or (800) 813-9185 today.
