Credit Card Protection

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Many credit card holders do not know their rights and protection.  Under the United States Credit Card Accountability Responsibility & Disclosure (CARD) Act, credit card companies must comply with the following Federal rules:

1.  Credit card payments.  A credit card company:

1.1.  Must include in your credit card statement how long will it take you to pay off your balance if you make the minimum payments only;

1.2.  Must deliver the credit card bill to you at least 21 calendar days before your payment is due; and

1.3.  Must apply any payments in excess of the required minimum payment to the balance with the highest interest rate, if you have more than one interest rate.

2.  Credit card interest rate.  A credit card company:

2.1.  Is prohibited from increasing your interest rate for the first 12 months after you opened an account except (a) if the rate is an introductory rate or a variable rate, (b) you are more than 60 days late in your payment, or (c) you are in a payment workout agreement and you do not make payments on time as agreed upon;

2.2.  Must deliver to you a written notice of rate increase before it can charge you higher rate for your purchases;

2.3.  Must send you a written notice explaining a forthcoming increase in your Annual Percentage Rate (APR) before it actually raises your rate;

2.4.  Is required to re-evaluate the increased APR every six months if it increased your APR; and

2.5.  Must charge interest on balances within the current billing cycle only and not on double-cycle billing system.

3.  Credit card fees.  A credit company:

3.1.  Must send you a written notice 45 days in advance before it can change your fees;

3.2.  Must give you the option of rejecting a fee increase (if you reject a fee increase, it may close your credit card account or may require a higher monthly payment);

3.3.  Cannot bill you a late payment fee of more than $25 regardless of the amount you owed except (a) when one of your last 6 payments was late or (b) the company can justify a higher fee based on the cost of late payments;

3.4.  Is prohibited from billing you a late payment fee higher than your minimum payment;

3.5.  Cannot charge you an inactivity fee for not using your credit card;

3.6.  Cannot bill you more than one fee for a single late payment or any other violation of your cardholder agreement;

3.7.  Cannot bill you over-the-limit transaction fees if you did not opt-in (meaning you do not allow transactions over your credit limit).

Last Words

I recommend that you print the above article for easy reference in managing your credit cards.  Also, you may want to inform your family members and others about these credit card protection.

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