|
CARD Act of 2009: |
|
|
It’s been all over the news... you may have even received notifications from your other credit card providers... GPO wants to be sure our members understand the changes that are happening with credit cards. The Credit Card Accountability, Responsibility, and Disclosure Act of 2009, or CARD Act, is a federal law passed by the United States Congress and signed by President Barack Obama on May 22, 2009. The purpose of this law is to protect cardholders from unfair practices that many banks and store cards utilize. Below are some of the highlights. First, GPO has always been ahead of our competitors. We never took advantage by charging astronomical interest rates nor did we ever tack on extra fees and charges. These unscrupulous practices by banks and other lenders are why Congress has enacted the CARD Act. While many card issuers are scrambling to meet compliance requirements and deadlines, at GPO we are pleased with the outcome of this Act. We’ve always kept our focus on our membership and our policies and procedures reflect this. We never misled members with sneaky rate changes, hidden fees or harsh penalties. Yes, the credit card scene is changing... But GPO members can rest assured, by carrying a GPO Visa Credit Card, they are benefiting from a low-cost, local financial institution that has always made our members our focus. And, don’t forget our Rewards Program. Every time you use your GPO Visa Card, you earn a point for every dollar spent. They add up fast and there’s lots of great gifts and travel incentives available. If you have a card balance elsewhere, now is the time to consider moving your card balance to a GPO Visa... the card AND credit union you can trust to be fair and honest! |
|
|
Highlights of the CARD Act: |
|
|
Protection from interest rate increases: • Credit card issuers must give a 45-day notice of rate increases. • Cardholders have the right to cancel their card and pay off their balance at the existing rate if they get hit with a rate hike. Cardholders have 3 billing cycles to say “no” to the new terms. •
Card issuers cannot increase the rate on an existing balance of a
cardholder in good standing for reasons unrelated to the cardholder’s
behavior with that card. Protection from excessive fees: • Card issuers
can only charge 3 over-the-limit fees. You have the right to set limits: • Card issuers must offer consumers the option of having a fixed credit limit that cannot be exceeded. Card companies cannot charge over-the-limit fees on a card with a fixed credit limit.
Payments are fairly credited: • Card payments
must be applied to the debt with the highest interest rate first (after
the minimum payment). Currently, many card companies pay off lower
interest rate balances first. • Credit card issuers can not use the terms “fixed rate” or “prime rate” in a misleading or deceptive manner. • Cardholders
who are pre-approved for a card have the right to reject that card up
until the moment they activate it without their credit being hurt. Protection from fee-heavy subprime cards: • All fees for subprime cards, whose total fees over a year exceed 25% of the credit limit, must be paid upfront, before the card is issued. These cards are generally targeted to vulnerable consumers who have had past credit problems.
|
Pay on time, you shouldn’t be penalized: • Card companies cannot charge interest on debt that is paid on time, during a grace period, and they cannot add fees onto the remaining interest-only balance of a cardholder who has paid their bill on time. • Card company cannot add fees onto the remaining interest-only balance of a cardholder who has paid their bill on time.
• Card companies must mail card statements at least 21-days before the due date, giving cardholders adequate time to pay their bill. • Payments made before 5pm on the due date are considered on time. Today, some card companies use a morning or early afternoon cut-off time for on time payments. • The due date must fall on the same day each month. If the normal due date falls on a Saturday, Sunday, or holiday, then the due date will be the next business day. • Every statement must provide a telephone number and website address that the cardholder can access for paying off their balance. • Card
companies can no longer charge late fees when a cardholder presents
proof of mailing the payment within 7 days of the due date. Congress will provide better oversight of the credit card industry: • Every year,
industry profits as well as card fees and rates will be presented to
Congress. • If you suspect a credit card issuer has violated these new rules, you may file a complaint with the Federal Reserve at www.federalreserve.gov.
|