Credit Card Act

Does the credit card act of 2009 really work? There is a lot of debate about whether this has helped the consumer or not.

The act is designed to make it easier for people to get out of credit card debt. How does it work? Here are the three main points:

1. Lower interest rates

This mainly helps people who already have a balance. How? Because there are now only a few times the credit card company can raise the rates.

One time is when the promotion ends and the regular rate kicks in. Another way they can raise it is if the rate is variable. Finally, if the customer makes a late payment they can also boost the rate.

If none of those conditions exist, they can’t raise the rates.

In particular, they can’t raise the rates because of your other financial activity. In other words, if you make a late payment on your car loan, the credit card company can’t boost your interest rates. Only if you make a late payment to them can they take action.

2. Over limit laws

Prior to this law coming out, the credit card companies wouldn’t stop a purchase from going through if it was going to take you over your limit. Now, they have to.

This makes a big difference. When you go over your limit, the companies would charge a fee. Now they can’t do that.

So does that mean you can’t buy something if it pushes you past your limit? Actually you can. You have to get something known as over limit coverage. This is where you can ask the company to allow purchases that push you past your limit.

However, you have to opt-in to this. If you don’t, the company legally cannot allow you to go over your limit. If you opt into it, you are allowed to make these purchases, with the knowledge that you will have to pay the fees that go with it. 

3. Late fees

Now, if you are charged a late fee, the company has to display when you made the payment to prove it was late. They also must tell how much they would charge you, and when the charge would be applied by.

Also, if they are going to raise your interest rate, they must state that, along with how much the new rate would be. In other words, they have to keep the customer updated on what’s going on.

So the law helps the consumer, right?

As you can see, there are many ways this act supposedly aids the customer. However, there are a few ways the banks get around it. For instance, one bank forces customers to pay a ninety-five dollar fee prior to even utilizing the card.

Other banks have boosted the minimum amount the customer has to pay, so the percentage has gone up from two to five percent of the total balance. This can obviously hurt people if their budget is tight. There are plenty of other ways banks have got around this law, and these are just a few examples.

The bottom line is, this law really hasn’t helped as much as advertised, because the banks are finding ways around it. You have to take the good with the bad.

That’s it for now. Until next time Divas, wear your heels well and Be Blessed!

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