On May 22, 2009, the Credit CARD Act of 2009 was signed into law by President Barack Obama. The full title of the law – Public Law 111-24 – is the Credit Card Accountability Responsibility and Disclosure Act of 2009. It amends the Truth In Lending Act, the Federal Trade Commission
Act and the Electronic Funds Transfer Act.  I know…that’s a lot of legalese.  I don’t personally use credit cards.  If I can’t pay cash for something, then I don’t need it.  I have lived without a credit card for over 10 years.  But I realize I am not the norm.  So if one is going to use a credit card…be EMPOWERED.
As the Consumer Financial Protection Bureau explains on the Consumerfinance.gov website, the law serves as a Bill of Rights

of sorts for credit card holders, prohibiting practices that are unfair or abusive, such as slapping fees for going over a limit or imposing a fee without warning. At its most basic level, the law seeks to make rates and fees on credit cards more transparent so consumers can see what they’re getting and make smarter financial decisions.

Credit card issuers must notify you of a rate increase – or any other significant change in terms to your credit card account – at least 45 days in advance. The Board aka Federal Reserve Board has developed rules that address what a “significant change” means.) This notice must be clear and conspicuous, and give you the opportunity to close the account. If you decide to close your account to avoid the new terms, issuers won’t be able to charge a penalty fee for closing your account, place you in default because you close your account while you still owe a balance, or require you to pay your balance in full immediately. If your card issuer does raise your rate (or says it will) and you close your account, your card issuer can require you to pay back your balance over five years or double your previous minimum monthly payment.
Issuers cannot increase the annual percentage rate, fee or finance charge on your existing credit card balance except in limited circumstances. Your rate can go up if the rate you were given was clearly disclosed as lasting for a certain period of time. For example, your card issuer could offer an introductory rate if you were told what the new rate would be after that period expired. Promotional rates must last for at least six months.
If you are 60 days late on a credit card payment, your issuer can raise your interest rate retroactively. However, you must be given the opportunity to earn back your previous rate if you make your minimum payments on time for six months.  Remember, an issuer cannot raise your rate on your credit card in the first year except in the circumstances above, such as with an introductory interest rate or if you fall 60 days or more behind.
If a credit card issuer increases your annual percentage rate based on factors such as your credit risk as a borrower or market conditions, the creditor shall consider changes in those factors when determining whether to reduce your annual percentage rate. Every six months (at minimum), issuers must review accounts on which they raised the interest rate since Jan. 1, 2009 to assess whether the facts they used to raise the interest rate have changed. If so, they must lower your rate.
Do I have your attention?  Stay tuned next month for more information on the ‘THE CREDIT CARD ACT OF 2009.’
Information provided by Tanika Capers, Esq.
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