Your Credit Card Rights

Millions of Americans use their credit cards every day to buy gas, fast food, groceries, clothing and entertainment products, to name a few.  As a nation, we love our little plastic cards, because they allow us to walk into any store, anywhere in the world, and swipe.  With the flick of a wrist, and the wonders of modern digital technology, we can purchase just about anything we put our hands on.

With all of the freedom associated with credit cards, there also comes a lot of responsibility.  Of course, we as consumers have the responsibility of paying our debts, and keeping our credit in good working order. But what about the credit card companies?  What kind of responsibility do they have in today's world, when it comes to the rights of consumers? 

Not very long ago, Congress enacted the Credit Card Accountability Responsibility and Disclosure (CARD) Act.  This new law brought about sweeping protections for consumers and required card companies to do a few things differently.  Here are some of the changes brought about by the CARD Act:

Your credit card company must comply with the rules below:

Fees

• The company cannot change rates or fees without sending you a notice 45 days in advance in most cases.
• The company cannot charge you a late payment fee of more than $25, regardless of how much you owe—unless one of your last six payments was late or the credit card company can justify a higher fee based on the cost of late payments

Payments

• The company has to tell you how long it will take to pay off your balance if you make only minimum payments.
•  The company must mail or deliver your credit card bill at least 21 days before your payment is due.

Interest Rates

• The company cannot increase your rate for the first 12 months after you open an account unless you have a variable interest rate or an introductory rate; you are more than 60 days late paying your bill; or you are in a workout agreement and don’t make payments as arranged.
• The company cannot charge higher rates for purchases made before you receive notice of a new rate.

In addition, a credit card company can grant credit cards to consumers under age 21 only if they can show they are able to make payments or have a cosigner for the card. 

There are more rights and responsibilities relating to the lawful use of credit cards.  More information about CARD Act protections is available from the Federal Reserve.  

(c) Adonis E. Hoffman  2013.