Understanding the Credit Card Accountability, Responsibility, and Disclosure Act of 2009

President Obama signed the Credit Card Accountability, Responsibility and Disclosure Act of 2009 into law on May 22 of that same year. The bill is a "Bill of Rights" for people who apply for and accept a credit line from a lender or credit card company.

This bill contains numerous changes to credit card laws. The new laws have a dual purpose: to protect consumers from unfair credit adjustment practices and also to protect the creditors. Listed below are some of the highlights of the Credit Card Accountability, Responsibility and Disclosure Act of 2009 - all of which were designed to help you avoid the need to hire a bankruptcy lawyer.

Unfair Interest Modifications

Unfair interest modificationshave been a problem in the past.  Credit card companies were allowed to raise the interest rates with little or no notification to the card holder.  This new law says customers must receive a minimum of 45 day notice when their interest rate is going to change. It also prohibits credit card companies from raising interest rates during the first year after the account has been opened. Introductory rates must remain in effect for at least six months.

Strengthening Credit Card Protections

Controlling & Limiting Fees

Lenders are no longer allowed to charge excessive fees to any credit card holder. If an account goes over the limit due to a transaction that is under dispute, the credit card company may not charge over the limit fees. Creditors will not be allowed to charge fees larger than a consumer's offense justifies and companies that issue cards with high interest rates and low credit limits will be made to lower their fees as well.

Payment Posting Guidelines

According to the new law your payment must be posted as quickly as possible. No longer can companies let your payment lay in their bank's lockbox and make your payment appear late even if it was sent in on time. Credit card companies cannot set early morning payment deadlines and if you pay more than the minimum,  the overage must be applied to the portion of your account with the highest interest rate.  Bills must now be sent a minimum of 21 days before the due date and if companies fail to mail the bills on time they are not allowed to charge a late fee if your payment is late.

Protection for Young Consumers

Protection for young credit card holdersis also part of the new bill. There are now limits on the methods companies can use to market credit cards on college campuses. Anyone under the age of 21 must now have a parent or guardian cosign the agreement.

These laws were designed to protect consumers from being taken advantage of by credit card companies but in some cases it is too late. If you are swamped with credit card debt, talk to a Minnesota bankruptcy attorney about Minnesota bankruptcy laws. An experienced Minnesota bankruptcy attorney may be able to find a solution for your financial problems.

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