Time for Change in Credit Card Game

New Rules Mean Significant Changes for Consumers

Date: May 23, 2009
Contact: Paul Golden 303-224-3514, [email protected]

GREENWOOD VILLAGE, COLORADO—Consumers soon will have the right to just say “no” specifically, to credit card interest rate hikes.

When President Obama signed the Credit Card Accountability, Responsibility, and Disclosure (CARD) Act of 2009 in May, the goal was to bestow on consumers more control in their relationship with credit card providers. And although many of the provisions of the CARD Act do not go into effect until February, two considerable changes go into effect today.

As of August 20, credit card companies must provide 45 days’ notice before increasing rates or changing any significant terms of the credit agreement, and mail statements at least 21 days before payment is due.

"The benefit with these immediate changes is that consumers will have more time to get a real handle on how they want to attack and deal with rate increases or other changes to their credit accounts,” says Brent Neiser, a Certified Financial Planner (CFP®) and director with the National Endowment for Financial Education.

Advance notice of changes

Credit providers now must provide 45 days’ written notice before amending the terms of a consumer’s account. This includes changes to interest rates. Prior to the initial CARD Act provisions, financial institutions only had to provide 15 days’ notice, unless the customer was in default on their account. The written notice must inform consumers that they have the right to cancel the account before rate increases go into effect.

More time to make payments

To increase fairness in the timing of payments, credit card issuers now must mail statements at least 21 days before the payment is due. This extends the time frame from 14 days when credit providers could treat a payment as late, and gives borrowers more reasonable time to pay their monthly bill. The provision intends to end late fee traps, such as weekend deadlines for payments and due dates that change each month.

"This will level the playing field between the credit card companies and the consumer to have a real fair shot at planning and taking action on their personal finances,” Neiser says. “Consumers will have to be proactive though to get the full benefits of the CARD legislation. This means being diligent with reading and fully understanding all correspondence that is sent from your financial institution,” he adds.

According to a release issued by the White House on May 22, Americans are paying approximately $15 billion in penalty fees each year.

"With this new law, consumers will have the strong and reliable protections they deserve. We will continue to press for reform that is built on transparency, accountability, and mutual responsibility—values fundamental to the new foundation we seek to build for our economy,” President Obama said May 22, upon signing the CARD Act.

The major provisions of the CARD Act reform will be in effect beginning February 22, 2010. The added rules include a ban on retroactive rate increases on existing balances, except in cases of severe default; better disclosure in credit card terms so consumers can easily understand the contract and avoid unnecessary costs; and protections for college students and marketing done on campuses.

For more information on the Credit Card Accountability, Responsibility, and Disclosure (CARD) Act and the provisions that will take place in February, click here.


  • Paul Golden

    Media Relations Director

    Direct: 303-224-3514
    Cell: 303-918-3620
    [email protected]