Credit CARD Act of 2009

May 28, 2010

On May 22, 2009, President Obama signed the Credit Card Accountability Responsibility and Disclosure Act of 2009 into law.  This new and unprecedented legislation, which will officially go into effect on February 22, 2010, aims to help consumers.  Credit card companies have been essentially free to act unethically towards their customers and this new law is designed to stop that. summarizes the law below and explains what YOU need to know!


  • Credit card companies must give the consumer 45 days notice before raising the interest rate on credit cards.

–          Credit card companies must also tell you in writing, 45 days before they increase any fees or other charges and/or if the creditors wish to change the terms of your credit card   agreement.  When the credit card companies contact you regarding the above items, they must write in an understandable and concise manner and tell you that you have the ability to cancel your credit card.

–          If you (the consumer) wish to close down your credit card, the credit card companies should not consider that a default on the existing balance and this should not cause the creditors to charge you a fee or penalty nor should the creditors force you to pay back any existing balance at that time.

  • Creditors can increase interest rates or fees if:

–          a special promotion (that the consumer has been previously informed about) has ended.

–          the consumer has not paid their credit card bill within 30 days after the due date of the bill.

–          a hardship agreement between the creditor and the consumer has expired.

  • 6 months after the credit card companies have raised your interest rate, they must review your situation and return the interest rate to the level before the raise if you’ve consistently paid your credit card bill on time.
  • Credit card companies cannot increase interest rates until 12 months have passed since the account was originally opened. (for cards with a special promotional interest rate, credit card companies can’t increase rates until 6 months after that card has been opened).
  • Double billing cycle and universal default are no longer permitted

–          Double-cycle billing is as follows:  Let’s say in June you had $1,000 in credit card debt, but in July you paid that debt down to $500.  Double-cycle billing would enable credit card companies to charge you interest as if the balance was $750, or the average of two billing cycles in a row.

–          Universal default would allow the creditors to raise your interest rates if you defaulted on another, completely non-related bill, such as a cell phone bill or a student loan.  Both of these practices are no longer allowed as of February 22, 2010!

  • Over credit limit fees and penalties are no longer permitted, unless the consumer wants the transaction to occur as opposed to it being canceled since the consumer is over their credit limit.
  • Creditors must send out the bill 21 days before the due date.
  • If you send in the payment on the due date before 5 pm, that must be considered “on-time”.


  • Credit card companies must tell you how long it will take you to get out of credit card debt if you only pay the minimum payment.
  • Creditors must disclose the total interest and principal costs of paying only the minimum payment.
  • The late payment deadline must be disclosed in a visible manner.
  • The credit card agreement must be posted on the Internet.


  • Those under age 21 who want credit cards must have a co-signer on the account.  A co-signer could be a parent, legal guardian or anyone over age 21 who is capable of paying off the credit card should the consumer under age 21 fail to do so.
  • Parents must give consent in order for credit limits to be increased, if that parent is a co-signer.
  • Credit card companies are no longer allowed to provide incentives (such as a free t-shirt or a free calculator) for students to sign up for credit cards on or close to college campus.


  • Dormancy fees (fees charged if the gift card is not used for a certain period of time) will no longer be allowed, unless the gift card has not been used within a 12 month time frame.
  • Gift cards cannot expire until after they have been opened for 5 years.

This is the bulk of the Credit CARD Act of 2009.  Some provisions have already gone into effect as of August 20, 2009 (such as the 45 days notice before credit cards can raise interest rates).

Tags: accountability, concise manner, consumer protection, consumers, Credit CARD Act of 2009, credit card agreement, credit card bill, credit card companies, credit card legislation, Credit Cards, credit cards credit, creditor, creditors, disclosure act, due date, interest rate, interest rates, legislation

13 Responses to Credit CARD Act of 2009

  1. […] should also be aware of the new credit card laws, which went into effect on February 22, […]

  2. […] affect anyone who uses credit cards. has summarized the entire law (click here to read the summary).  However, in this article, we outline the pros and cons of this new and […]

  3. […] bills on time, they are unfit to carry a credit card on their own!  In fact, last month, the Credit CARD Act of 2009 went into effect, which made the access to credit for those under age 21 much tougher by requiring […]

  4. […] Credit CARD Act of 2009 included provisions to protect consumers from those “over the credit limit” fees, which could […]

  5. […] this extra money and save it!  Plus, with the new credit card laws that recently went into effect (Credit CARD Act of 2009), it’s going to be tougher and more expensive to get credit.  Credit card companies are slashing […]

  6. […] gripes about credit card companies continue to worsen! In February 2010, the Credit CARD Act went into effect, which essentially provided more transparency for consumers. The new law requires […]

  7. […] to climb.  There has been an overwhelming amount of “reforms” over the past few months: credit cards, health care, student loans and now Wall Street.  Is Wall Street reform needed and what are the […]

  8. […] You’ve probably seen the marketing tents and booths that credit card companies set up on college campuses to try and persuade college students to sign up for credit cards that are littered with high interest rates (sometimes 30%) and outrageous fees. Credit card companies used to give out free lunches and t-shirts to those who applied for a credit card — that’s no longer allowed thanks to new legislation that took effect in February 2010. […]

  9. […] is attributed to the fact that Americans are beginning to pay off their credit card debt.  The Credit CARD Act of 2009 (new legislation that took effect in February 2010 to provide more transparency to consumers), is […]

  10. […] there has been an overflowing amount of regulation.  Since February 2010 alone, there has been the Credit CARD Act, which completely reformed the entire credit card industry and of course the massive financial […]

  11. Get Business Alerts | Bad Credit Companies on November 5, 2010 at 12:32 am

    […] up for credit cards. thanks to the Credit CARD Act of 2009 (legislation that took effect in February 2010 to create transparency […]

  12. […] and booths on college campuses to convince students to sign up for credit cards. Thanks to the Credit CARD Act of 2009 (legislation that took effect in February 2010 to create transparency and fairness in the credit […]

  13. […] and booths on college campuses to convince students to sign up for credit cards.  And with the Credit CARD Act of 2009, some relief came when the new laws prohibited credit card companies from giving out incentives […]

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