Surrounded by members of congress, consumer advocates (including Consumers Union's Ellen Bloom and Pam Banks), President Barack Obama today signed the Credit Card Accountability, Responsibility and Disclosure (CARD) Act. "Just as we demand that credit card users act responsibly, we demand credit card companies act responsibly, too," the President said. Among other things, the new law will make it harder for card issuers to raise interest rates without warning, and will require that statements be mailed out at least 21 days before payment is due. Most of the changes under the law won't go into effect for nine months.
Related:
What to do while you wait for credit-card reform to kick in
Credit card bill affects gift cards as well
What's in it for consumers?
Credit card reform bill: "Bye-bye" to Hello Kitty?
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Posted by: Bill Lindeman | May 22, 2009 5:09:02 PM
After an excellent history with Capitalone since 2003 and a sterling record, I received notice today of a rate change, applicable to cash purchases, effective 7/2/09 that will apply not only to new charges made but to existing balances as well. The rate is changing from 4.11% to 24.9%!!!
I know that you have been working on advocacy issues with credit cards. I realize this has all been in a effort to support the president with the credit card reforms he has already signed. I'm writing to ask if there is anything I can do about this. This is criminal behavior on the part of these companies who are trying to recoup their lost revenue on the backs of their best customers. We should not be the ones who have to pay the price for the irresponsible investment decisions and lending practices that started this recession.
Bill Lindeman
Posted by: Joseph Godfrey | May 22, 2009 6:22:49 PM
How about credit card percentages that are a closer balance with bank interest rates? They force us to pay them 20 to 30% interest while they offer 2,3,5% to us.
What about a "bail-out" for people in debt with the banks? Current government payoffs won't encourage banks to give loans or withhold foreclosures; People can't even claim bankruptcy anymore without losing everything.
What can we do?
The best thing to do is cut up your credit cards; One problem with the American economy has to do with people living beyond their means through credit.
Another thing would be to demand greater local independence: Stop your mayors, governors representatives from relying on outside interests to help boost your local economy. The wealthiest States in the country are wealthy because they are independent from outside aide ... especially from the federal level.
One final solution would be to stop demanding our government punish businesses. Even if it is the oil corporations or Wal-Mart; our government must never decide which businesses should profit and which should not. This very thing created our managed economy and helped destroy the free market.
Posted by: Michael Martinez | May 22, 2009 7:21:11 PM
Not only did this law not help consumers, it allowed the banks that have accepted Federal bailout money to keep their interest rate hikes from two months ago.
So after all the consumer complaints about how banks arbitrarily tripled interest rates for all their customers, absolutely no relief is in sight.
The Congress and the President should be ashamed of themselves for passing a sham bill that completely ignores the problem at hand.
Many consumers have already cancelled their credit card accounts without understanding that they will reduce their credit scores by giving up available credit.
They still have to pay off the credit card balances.
The rest of us now either have to stop using our existing cards and get new cards with low introductory rates or pay triple interest on new charges.
Obama, if that's the best you can do you need to resign and let a REAL President serve in the office.
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Posted by: eric | May 26, 2009 12:51:25 PM
This is all a NON-issue if you don't carry a balance on your credit card. When I was shopping for a new rewards card, interest rate didn't have any affect on me as I NEVER carry a balance. How do I do that? I don't buy anything I couldn't pay cash for at the time of purchase. It's pretty simple. I don't use a credit card as a line of credit, and anyone who does is simply making the wrong choice.
Check out:
http://www.daveramsey.com
Posted by: John | Jun 2, 2009 11:38:35 AM
How does this help the people that are behind in credit card debt. This is the real problem. Thousands of people have went to collections using their credit cards to help ends meet. We need Bail Out Package to help so many people to wipe off their credit card debt, along with rstrictions on further use so this never happens again. They all need a NEW SLATE.. Where is the help for them? This where we need the help, not to get a long awaited correction to the credit card companies now. The damage is here NOW...
Posted by: Shirley Berkley | Jun 19, 2009 12:14:48 AM
I was a student at a local community college during Spring, 2009. I dropped the class and was told that a refund was owed to me.
I later learned that my local community college had outsourced this function to a third party vendor (TPV). The TPV states on their website that their objective is to provide "Integrated financial aid disbursement services for universities that want to save money and provide convenient financial service solutions for the whole community."
So, in order for me to get reimbursed....I have to activate the credit card I was issued by this TPV (the college sent over my personal information.) Once my newly issued credit card account is activated on their website, I can THEN request a "paper check" be issued in my name.
No student, and I mean NONE, are allowed to opt out of this program. ALL students who register with this institution is also forced to get a credit card for the purposes of facilitating these monetary transactions.
Everyone is forced to accept this program if they want to attend college there. I understand the college is looking for ways to cut costs and streamline processes; however, I find it appaling that we are being forced to take on yet another credit card when I do not want or need one. Not to mention that this company has a complete monopoly (7 campuses in total) comprising of nearly 65,000 students!
As far as I am concerned, the relationship between the college institution and the credit card company is adversely affecting my ability in seeking quality education. According to the college there is NO "opt-out" option, talk about captive audience!
Will this Act help us in these types of scenarios?
Posted by: Jeff | Jul 10, 2009 10:04:10 AM
What the h*** is wrong with you? There are spenders and there are savers. It's the spenders that got these cards and got themselves in trouble. They need to take personal accountability for their actions NOT the government. If they can't learn to manage their money then do you think the government is going to miraculously fix it with a bailout? Let's bail everything out that needs fixing. Hmm. Sounds like the war on drugs and the war on poverty - hasn't worked and never will.
In response to the message below.
How does this help the people that are behind in credit card debt. This is the real problem. Thousands of people have went to collections using their credit cards to help ends meet. We need Bail Out Package to help so many people to wipe off their credit card debt, along with rstrictions on further use so this never happens again. They all need a NEW SLATE.. Where is the help for them? This where we need the help, not to get a long awaited correction to the credit card companies now. The damage is here NOW...
Posted by: luis concepcion | Sep 3, 2009 9:42:12 AM
this act was exactly that, an act.
It should have gone into effect immediately, with a freeze on credit card interest rates, or maybe even a roll-back in rates to a reasonable level.
How about linking the interest rates to the bank's cost of funds, which is below 1%, or at least place a limit on rates in relation to the prime rate. It's OK for the banks to make a profit, but the interest rates they charge on credit cards has become unbearable. And they have you trapped, because at these rates, it's hard to pay down your balance. All the government did was give the banks plenty of time to raise their rates before this "act" was in place. What a joke! Just like these comments. Who reads this anyway, and what good will it do?
Posted by: Don Moreaux | Oct 19, 2009 9:53:09 PM
For more than 5 years, CitiBank has held our business credit card account, and we've never carried over a balance during that time. Just last week we received a letter from a Ken Stork (Citibank exec (?) form letter) outlining an increase from our current 12% to a wonderful 29.99%. Ken's wonderfully written letter also mentions steps for us to take if we would like opt out of this increase; step one required a phone call. We took that step, talked to nice young man from Bangalore, India who could use additional English lessons, and was promptly told that he could work with us to pitch us a better offer, if we just waited 3 days for him to work up a new offer. This young man went on to explain the increase is all due to the increase in lending rates Citibank has to deal with, so do not blame the bank.
We clearly explained that we wanted no part of any offers from Citibank, and would he please close our account, but send us a final balance. To which yet another offer was pitched our way, to which we quickly refused, and again we requested our final balance. This comedy conintued for about 4 cycles - I'm nothing if not tenacious.
We've been fortunate to be able to pay off our balances each month, a point that makes this incident even more rediculous. For those who aren't as fortunate, these unethical increases by the banks should be considered criminal.
Goodbye Citibank!
Posted by: Karen Freed | Oct 23, 2009 7:39:08 AM
Recently received a letter from HSBC informing us that our rate will be increased. Furthermore, our fixed rate has just been converted to a variable rate. This rate change is to be applied not only to new purchases but to the existing balance. Our "up yours" salute to HSBC was offered without hesitation. The account is now closed. Screw the credit rating. The reason we were given for this affront was "bank practice." In other words, due to no apparent reason whatsoever aside from pure, unabashed greed. I highly recommend this action to any and all who are being screwed by their credit card company... the feeling of telling these jokers to "f- off"...now THAT'S priceless!