Congressman Bill Owens is praising new implementation of the CARD Act, including the “Credit Cardholders’ Bill of Rights.”
The bill, H.R. 627, contains several strict protections for consumers, such as banning unfair interest rate increases and forbidding abusive fees and penalties by credit card companies. Additional consumer protections under this legislation are effective as of Sunday, Aug. 22 under the Credit Cardholders’ Bill of Rights.
“These increased consumer protections will put more control into the hands of credit card holders and will hopefully go a long way in helping them to manage finances and pay off debt,” said Owens.
In addition to the consumer protections that are already in effect, on Sunday two additional provisions go into effect.
One will require penalty fees for such things as late payments to be reasonable and proportional. The other requires credit card companies, if they raise your interest rate, to re-evaluate that rate increase every six months and, if appropriate, reduce that rate within 45 days after completing the evaluation.
Some of the key consumer protections in the “Bill of Rights” that went into effect in last year and early this year include prohibiting retroactive interest rate hikes on existing balances and banning double-cycle billing, where companies charge interest twice on balances paid on time.
The bill also requires statements be mailed 21 days in advance of the payment date and that the payment date remain the same each month.
It requires 45-days’ advance notice of interest rate, fee and finance charge hikes, and it strengthens credit card protections for young people.
It also requires that billing statements from credit card companies be clear, be in plain English, and show how long a balance will take to be fully paid off if only the minimum payment is made.
A recent analysis by USA Today concluded that the new credit card protections, along with debit-card overdraft reforms recently instituted by the Federal Reserve, will save U.S. consumers at least $5 billion in fees this year alone.