Senator Boxer:  Keeping Credit Card Companies Accountable   

Thursday, March 11, 2010  

Dear Friend:

All too many credit card customers know the feeling of opening their statement and finding notice of an interest rate increase they never signed up for, or a penalty or late fee imposed because of a technicality.

Last year, I was proud to work for passage of the Credit Card Accountability, Responsibility, and Disclosure (CARD) Act, which will restrict these unfair practices by credit card companies. Your new rights under this historic legislation took effect on February 22, 2010.

The CARD Act puts strict limits on the ability of credit card companies to retroactively increase interest rates on existing balances. Your credit card company must give you at least 45 days notice before any interest rate increase, and the new interest rate will apply only to purchases going forward. There are also strict limits on any interest rate increases in the first year you own your card. Prior to the CARD Act, creditors were able to raise interest rates on existing balances at any time and for any reason.

The CARD Act ends late fee traps – you get at least 21 days to pay your bill before any late fee is charged, and you must be clearly notified of due dates.  The CARD Act requires credit card companies to inform consumers of how long it will take to pay off card balances while making the minimum payment, prohibits those under age 21 from obtaining cards without proof of income or a co-signer, and blocks creditors from automatically enrolling consumers in programs that allow them to exceed their credit limits.

For more information on your rights under the CARD Act, see the White House fact sheet at http://www.whitehouse.gov/the_press_office/Fact-Sheet-Reforms-to-Protect-American-Credit-Card-Holders/ . You might also want to visit the CreditCards.com website at http://www.creditcards.com/credit-card-news/credit-card-law-interactive-1282.php

Other provisions of the CARD Act will go into effect later this year, and Congress will be considering further legislation to provide additional consumer protections. You can count on me to keep working to protect American consumers from unfair practices by credit card companies.

Sincerely,