understanding-the-card-act

What Is The CARD Act?

By changing the information available on their monthly bills, the new credit card law may also inspire customers to seek credit counseling before their debt gets out of control, according to a release by Accelerated Debt Consolidation, Inc.
The Credit Card Accountability, Responsibility and Disclosure Act of 2009 currently requires that lenders include a toll-free phone number for credit counseling and debt management services on monthly bills. They must also include a timetable showing how long it would take a consumer to pay off their debt if they only made minimum payments.
“This creates several advantages for the consumer,” Young said. “If credit consumers begin contacting credit counseling and debt management agencies when they are only up to 30 percent of their credit limits for example, their options for reducing their debt will be greatly improved.”
Cardholders with high rates on their balances would be able to transfer the debt to accounts with smaller balances in the debt management program. Or they can transfer money to accounts with better rates, allowing them to reduce debt faster. Carrying low credit card balances and paying on time can positively contribute to a consumer’s credit history.
Other provisions within the Credit CARD Act prohibit lenders from raising interest rates, fees or terms unless they give customers 45 days’ advance notice.