New credit card laws go into effect in August. The Credit Card Accountability Responsibility and Disclosure Act (or Credit CARD Act) of 2009 includes the most sweeping changes in how credit cards are marketed, advertised and managed in decades.
The law limits when credit card interest rates can be increased on existing balances and allows consumer whose interest rates have been increased to reduce their annual percentage rates (APRs) to previous levels if they have been good and paid their bills on time for six months.
Consumer protections started being phased in during August 2009. At that time, all card issuers had to begin giving 45-day advance notice of significant changes in card terms. They also to give consumers at least 21 days (instead of the previous 14) to pay their monthly credit card bills. The bulk of the consumer protections – limiting when interest rates can be increased, banning universal default and double-cycle billing, and restricting credit cards for minors, took effect February 22, 2010.
Provisions for restoring interest rates to previous levels if cardholders show six months of good behavior start on August 22, 2010. Making gift cards valid for at least five years and requiring that fees are reasonable.
Other provisions of the bill include:
Fines of up to $5,000 for card issuers that violate the act.
Banning universal default and double-cycle billing.
Prohibiting over-limit fees unless consumers agree to allow transactions that exceed their credit limits o go through rather than be denied.
Fees for late payments, over-limit charges or other penalty fees must be reasonable and related to the violation.
A blog post on Get Rich Slowly includes an illustration showing Anatomy of Credit Card Statement.