The Credit Card Reform Act Is Now Law

It is now official. The long awaited so-called Credit Card Holders Bill of Rights has been signed into law and is now officially known as the (Credit CARD Act) Credit Card Accountability, Responsibility and Disclosure Act of 2009.

We have discussed in length exactly what these new laws will mean to credit cardholders so please feel free to read over prior posts to familiarize yourself with the legislation if you have not done so already.

What I think we need to address now it’s exactly when the new credit card reform laws will go into effect. In actuality the different aspects of the law will be phased in over the next 15 months beginning on August 20, 2009.

By August 20, 2009 credit card account holders must, by law, be given at least 45 days advance notice of any major changes to the credit card terms and conditions. Also by this date consumers will have at least 21 days to pay their monthly bills as opposed to the current time period of 14 days.

By February 22, 2010 we will see the the vast majority of consumer protections go into effect. These protections include prohibiting the practice of double cycle billing, restricting the issuance of credit cards to minors and putting limits on when interest rates can be raised.

This portion of the legislation actually created some controversy with consumer advocate groups. They argued vehemently that these changes must go into effect as quickly as possible in order to bring relief to beleaguered consumers.

August 22, 2010 will see a rather a interesting provision go into effect. That is the date when cardholders that exhibit responsible behavior over the past six months, but have had their interest rates raised prior to that, will have those interest rates reduced to what they were prior to them being raised.

The legislation also steps away from credit cards and addresses gift cards as well. In August of 2010 all gift cards must be valid for a period of no less than five years of their date of issue.

Many of these laws overlap with the Federal Reserve’s Credit Card Holders Bill of Rights that goes into effect in July of 2010. In our next post we will discuss how these new laws will actually play out for the consumer and how the credit card companies are likely to respond.

Related Information:

  1. Credit Card Issuers Raising Rates Ahead of Reform Protections If you recently received a notice from your credit card company that they will be raising your interest rates you are not alone. Millions of credit card account holders that…
  2. Credit Card Issuers Hike Interest Rates Before New Reform Laws Can Take Affect Credit card reform legislation that was signed into law in May of 2009 by President Obama was designed to stop the predatory practices that credit card companies have used to…
  3. What Credit Card Reform Has Brought Us So now we know that it’s a done deal. The Credit Card Reform Act of 2009 has been signed into law by President Obama. And now the politicians can sing…
  4. How the Banks See the Impact of Credit Card Reform The Federal Reserve did something very interesting recently. They conducted a poll of banks in the U.S. to specifically ask them how the new Credit Card Reform Act would affect…