Credit Card Accountability Responsibility and Disclosure Act of 2009

The Credit Card Accountability Responsibility and Disclosure Act of 2009 (CCARDA) takes effect on February 22. It is one of the first pieces of legislation passed by President Obama and the Democratic majority in Congress.

These reforms will help Georgia families repay their debt while protecting them from fraud and unjust business practices.

These changes include:

• New rules for card payments. Monthly statements must be delivered at least 3 weeks in advance. Payment deadlines must be after 5pm, and cardholders can’t be charged extra for paying online or over the phone. One exception? Phone payments on the due date, or one day prior, can still be charged a fee.

• Over the limit opt-in. Cardholders must agree to exceed their credit limit. With no agreement, the credit card company cannot allow you to go over the limit.

• Longer notice for interest rate changes. Card issuers must give cardholders a 45-day advance notice in the event of an interest rate change. Additionally, promotional rates must apply for at least six months and, unless disclosed up front, cardholders cannot have their rates increased in the first year.

• Cardholder opt-out. If the company changes the terms to an account, cardholders can reject those changes. If so, they have five years to pay off the balance under the original terms.

• Increased disclosure on minimum payments. Card issuers must disclose how long it will take cardholders to pay off their bills if they only pay the minimum monthly payment. In addition, each statement will disclose to cardholders the payment needed per month to pay off the balance in three years.

• Older age restrictions added. People under 21 will find it much more difficult to receive a credit card. Credit card companies will also face new restrictions on how they can promote cards to college students.

• Overpayments go toward highest interest balances. If the cardholder has varied interest rates for different services or accounts, any overpayments must be applied to the account that is incurring the highest interest rate.