BY KRISTIN BRITTAIN
Lions’ Pride Editor in Chief

February is not only a month of romance and chocolate, it is also a month that card holders’ wallets will love also. The Credit Card Accountability, Responsibility, and Disclosure (CARD) Act of 2009 will be fully exercised by credit companies beginning February 22, 2010.

Almost 80 percent of Americans own a credit card and 44 percent of them have a balance on the card. With these outstanding numbers, many people are left wondering what the new changes will mean for them. Credit card users can expect an impressive change on their credit card terms. Interest rates, fees, reward programs, policies, and grace periods will be affected. The new credit card legislation will be easier to understand and is a huge success for consumers, but it is accompanied by many changes. Students in particular will be affected because one of the new policies will make it harder for them to obtain a card.

No one under the age of 21 can have a card unless a parent, legal guardian, or spouse is the primary holder. Written permission will be required from the parent, guardian, or spouse in order for the student to use the card. However, students with proof of their own income can ask for an exception to the co-signer requirement.

Here are some of the highlights to the new bill. A great stride for consumers will require banks to wait until the consumer is 60 days late on making the minimum payment before applying a penalty interest rate to the existing total. Also, credit card companies will have to give the card holder 45 days before raising the interest rate and must supply a notice to any change to the card holder’s terms.

Banks must mail the bills out no later than 21 days before their due dates. This will help avoid late fees and give the card holder more time than previously allotted. Also, if the company receives the payment before 5 p.m. on the due date it is still considered on time. There will also be no more late fees if the payment due date is on a Sunday or a holiday.

If the consumer is paying different interest rates on the same card a payment made will be applied to the highest-interest rate first. Also, credit cards will now need the credit card holder’s permission before allowing the holder to spend over their credit limit and slapping them with a $39 fee.
The bill was originally signed by President Obama in May 2009 and it quickly passed through the Senate and the House.

“With this new law, consumers will have the strong and reliable protections they deserve. We will continue to press for reform that is built on transparency, accountability, and mutual responsibility – values fundamental to the new foundation we seek to build for our economy,” said President Obama on the CARD fact sheet press release.

The comprehensive act will include protection for gift card usage and will require enhance disclosures to the consumer. The majority of the bill was enacted to help serve credit card holders and protect them from the common traps set out by credit companies.