How to Benefit From the New Credit Card Law

When the Credit Card Accountability, Responsibility, and Disclosure (CARD) Act of 2009 was passed into a law, many consumers are hopeful that the changes will protect them from unreasonable terms and conditions imposed by credit card companies.

Nevertheless, the changes to the Credit CARD law can only be beneficial if you are aware of your exact rights and privileges as a credit cardholder. Knowing the provisions of the Credit CARD law is only the initial step. In order to truly benefit, a cardholder must act accordingly to protect him/herself against sudden rate increases or changes in your credit card’s terms and conditions.

In this article, let’s talk about some of the major modifications applied to the new Credit CARD law and how you can use it to your advantage.

The 45 Days Notice

Some consumers may get the wrong notion that their interest rates will never increase. But under the new law, credit card issuers can still increase interest rates on future purchases provided that they send notice 45 days prior to the increase.

In order to benefit from this provision, a credit cardholder must regularly check notices or mails sent by the issuer. Otherwise, you could miss the alert and may get surprised about the unexpected increase in your rate.

If you do not agree with the proposed new rate, you can negotiate with your credit card issuer to retain the present rate. Nevertheless, if your issuer refuses to give in, you have the opportunity to “opt out” and cancel your account before the actual increase takes effect. But watch out! Before you cancel your card, make sure that you can pay off all your existing balances to avoid damaging your credit history.

Interest Rate Hikes Without Notice

Other circumstances where an issuer can raise your credit card interest with no advance notice include the following conditions:

• When the introductory rate expires

• When your card has a variable rate When you have fallen behind your payments for more than 60 days

To protect yourself against unpleasant surprises, be sure to read and understand your credit card Agreement before submitting your application. Remember that if your card has a variable rate, increases are to be expected because your interest is directly dependent on the market’s Index Rate.

If your credit card offers a low introductory APR, be sure that you understand what the regular rate would be when the introductory period ends. Also, you need to be aware of the exact length of the introductory period so you can complete your payments before the regular rate is applied.

Last but not least, submit your payments on time to avoid the risk of bad credit. In case your issuer increases your rate because of a 60-day delinquency, you should know that your issuer must give back your original rate after 6 months of consistent payments.


About the Author:

Suzy Vanstrusen is a credit analyst and a writer on the website She has been providing consumers with tips and wise information about credit repair as well as helping you out more with your bad credit loans.  Copyright © 2010

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