Credit Card Laws and You
Free T-shirt? Not really!
Before February 2010, credit card companies would set up tables in common areas on college campuses and offer free stuff such as T-shirts, gift cards, and iPods, to get students to sign up. A few weeks later, the students would receive their credit cards in the mail.

College students put these new credit cards to use. According to a 2009 Sallie Mae Study, students graduated with an average of over $4,000 in credit card debt; 82% of students with a credit card carried a balance month to month.

Consumer protection

Not only is debt a problem, but unfair credit card company practices have cost consumers a lot of money, time, and effort.

“With this new law, consumers will have the strong and reliable protections they deserve.”
--President Obama

New laws have since increased the protection for consumers against unfair credit card company practices. In May 2009, President Obama signed the Credit Card Accountability, Responsibility, and Disclosure Act, commonly known as the “CARD Act,” into law.

The CARD Act is meant to protect all consumers, but it will especially affect us as young adults.

The CARD Act protects young adults

The CARD Act bans unfair:

It also requires:

Bye bye universal default.

Protection from interest-rate increases

Under the CARD Act, if a credit card company intends to raise your interest rate, it has to give you at least 45 days’ notice. The new rate can only be applied to new charges, not to the old balance. Along with the notice, the company must provide you with the option to cancel your card before the new rate goes into effect.

In addition, companies cannot increase your interest rate within the first year after you open your account.

Clearer statements

If you compare two credit card statements, one from 2008 with one from 2015, you might notice a difference.

Credit card companies now must include information about how long it will take you to completely pay off your credit card if you only make the minimum payments. They must also tell you how much interest you will pay.

A company must also include how much you need to pay each month to pay off the balance in 36 months. It’s an eye-opener.

Clearer statements also help with controlling unfair credit card fees...

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