Washington, DC-The Credit Card Accountability Responsibility and Disclosure (CARD) Act goes into effect today, creating better safeguards to protect credit card users. Michael Bennet, U.S. Senator for Colorado, cast the deciding vote to move the bill out of committee before it was approved by the full Senate last year. The legislation puts new, common sense rules in place that make it harder for credit card companies to take advantage of their customers.
"I applaud these changes as a good start for protecting families and consumers in a difficult time," Bennet said. "We must use this momentum to finish the job of cleaning up Wall Street, and create an effective independent agency to protect consumers. These reforms are a positive step, but they should remind us that reform cannot afford to wait for the next crisis to hit."
Key provisions that go into effect today:
- Credit card companies cannot randomly increase interest rates and fees on existing balances.
- Credit card companies must give customers 45 days notice of any changes.
- Credit card companies must state their rules clearly and tell customers how long it will take to pay off their balance.
- Banks cannot increase interest rates within the first year of opening an account.
- The practice of "double-cycle" billing will no longer be allowed.
- Credit card companies must cap fees and ensure that payments apply to high-interest balances first.