What Obama’s Credit Card Reform Means For You

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What Obama’s Credit Card Reform Means For You


Carl is skeptical about President Obama and his legislation.

After all, it can be difficult to separate political rhetoric from the ways in which legislation affects you, the taxpayer.


Carl uses his credit card responsibly when he’s in a sticky situation,

but has incurred a little too much debt due to rising interest rates and fine print.


After sorting through the Credit Card Accountability,

Responsibility, and Disclosure Act, Carl discovered some surprising and exciting facts.

Carl found that the act exists to protect

consumers from creditors that might

try to take advantage of him and his situation.


No more fine print and no more confusing language!

The law mandates that credit card companies send out application forms and balance

statements with all information regarding their finances in

plain language and in plain sight.


It also ensures that consumers can shop for a card without the fear of being taken

advantage of.

Now Carl can choose his card through websites like CreditCardXPO without the

fear that some of the

cards are dangerous,

or duplicitous.

http://www.creditcardxpo.com


And finally, the law states that there will be more accountability in the system, so those companies who do engage in deceptive practices that hurt families and consumers will be shut down.


Specifically, the law now:

1. Bans unfair trade increases

2. Prevents unfair fee traps

3. Contains plain sight and plain language disclosures

4. Holds regulators accountable

5. Protects students and young people


#1 Unfair Trade Increases


The law bans retroactive rate increases, and provides first year protection for consumers like Carl.

A creditor is no longer able to change the percent interest rate for no reason, and must abide by the

stated introductory contract for a year.

They may change the terms of the contract after the first year, but must spell out clearly in plain

language what those changes entail.


#2 Unfair Fee Traps


Institutions will now have to give card holders a reasonable time to pay the monthly bill –

at minimum 21 calendar days from the time of mailing.

It also ends late fee traps

such as weekend

deadlines, due dates that

change each month, and

deadlines that fall in the

middle of the day.


Finally, it limits fees on gift and stored value cards, so Carl can’t be gouged

every time he uses one.


#3 Plain Sight and Plain

Language


The law now requires card issuers to show the consequences to consumers of their credit decisions.

Issuers have to display on periodic statements how long it would take to pay off the existing balance - and the total

interest cost - if the consumer paid only the minimum due.


And they now have to display the payment

amount and total interest cost to pay off the existing balance in

36 months, helping Carl decide how best to settle his debt in a realistic manner.


#4 Accountability


Regulators and consumers like Carl can now better monitor changes in terms!

Instead of only being available in hard copy and in confusing language,

the law mandates that credit card companies post contracts with consumers

on the Internet in a usable format.


To protect consumers, regulators will now be required to report annually to the congress on their enforcement of credit card protections.

And regulators are now required to get input from Carl on potential consumer protection issues on a biennial basis to determine what

new regulations or disclosures might be needed.


#5 Student and Young Adult

Protection


Finally, the act contains new protections for college students and young adults. Card issuers and universities are now required to disclose agreements with respect to the marketing or distribution of credit cards to students.


So Carl no longer needs to worry about his children signing up for a credit card on campus in return for a free pizza!


Carl still isn’t sure what to make of the political rhetoric coming from both sides, but this new law protects him and his family from credit card issuers who may mean him harm.

And Carl knows that’s good for him and his wallet.


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today!

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Economy & Finance

What Obama’s Credit Card Reform Means For You