The Credit Card Law: Credit Card Accountability, Responsibility and Disclosure Act will be implemented step by step between August this year to August 2010. The law contains 13 main executive directives. These are as follows:
Beginning August 2009
1. Credit card report must be sent 21 days (not 14 days) prior to the sending of invoice
2. Credit card companies are required to issue a 45 days’ notice (instead of 15 days) ahead of any increment in interest rates and other fees.
Beginning February 2010
3. Card companies are no longer permitted to increase the level of fees on current balances, except payment is overdue for more than 60 or a concessionary fee expires
4. Concessionary fees must be operational for minimum of 6 months
5. Unless a concession runs out, the fees on new cards must not be increased in 12 months
6. All payments above the minimum allocated must first be used on the balance with the maximum interest rate, before the can be applied to other balances in a descending order
7. Above the limit fees are permitted only if a consumer has for it and it has been approved
8. All applications from people below 21 years of age should an adult endorse them or must show proof of ability to pay and must be approved
9. Card companies are not allowed to offer sign-up incentives or baits to college students
10. The practice of “universal default” in which card companies increased fees on the basis that clients were late for payment on other accounts, is prohibited
11. It mandatory for Credit Card companies to specify in statements the duration and amount required to pay off an outstanding balance if a consumer only makes the minimum payments
12. Card companies are no longer allowed to calculate fee charges using the average of daily balances on the basis the preceding billing cycle.
Beginning August 2010
13. Cardholders who attracted a fine by an Annual Percentage Rate (APR) for belated payment can get back to paying at the lower rate if they are able to begin repayment on time over 6 successive months.
