Is the Credit CARD Act ethical to consumers or the banks?
When it comes to credit cards, many consumers have been getting shafted. All of the major banks providing credit cards have gotten away with reaping profits, and they have no problem lobbying and distributing the money to any Washington lawmaker that get in their way. Washington lawmakers are getting this dirty money from these banks to keep their regulatory laws and their profits in tact so it will not affect the credit card industry if it becomes law in a few years. During George W. Bush’s presidential terms, if anyone attempted to change any provision regarding the credit card regulatory laws, the changes were usually fizzled out and swept under the rug. The credit card industry was fine and there were more choices for the consumers and there was no reason to amend anything. There was no credit card reform in sight.
On the other hand, the United States has been in a recession and we have a new president and an administration in Washington, and they have made credit card reform one of their top priorities. The credit card industry is directly linked to consumer debt and as a result, the industry must be reformed. In May of 2009, the Credit CARD Act of 2009 was implemented. However, the bill’s first provisions were not in effect until just recently.
Things you should consider if you are a credit cardholder.
- There must be a written notice forty-five days in advance by the credit cardholder if your interest rate of your credit card has increased.
This will eliminate the unethical practice of allowing lenders to raise your interest rates on your account that is outstanding, delinquent, or unrelated to other credit card companies.
- Credit card companies are prohibited from changing terms of your original contract. They can no longer charge you at any time or for any reason.
You will no longer get an automatic late fee on your credit card because the payment due date fell on a non-business day or non-work day at your bank. If your due date falls on a holiday or a weekend, the due date will fall on the next business day and this is now required by law.
- Credit cardholders are allowed twenty-one days to pay their credit card balances instead of the minimum fourteen day period.
Credit cardholders are now given three billing cycles to pay off their balances via existing terms if the interest rate has skyrocketed.
- It is required that all payments are allocated in portions of the credit card balance with the highest interest rate descending the lowest interest rate.
Your highest rates are paid first, which was not always the case before.
- Limitations on the limit fees that are now three per credit card account.
Unlimited limit fees are very common; many lenders had this practice in place for credit cardholders that exceeded over their credit limit.
The credit card companies do not want you to read the Credit CARD Act of 2009.
There are more provisions in the Credit Card Act of 2009; this is just the tip of the iceberg. Credit card companies could not care less about consumers; they have no trouble raising interest rates, limit fees, and other restrictions that have not even reached the full level of potential in regards to regulation. The thing that is most shocking about these new regulations mentioned above is that banks and credit card companies would not agree to any of these provisions if they were not enforced by the law.
Credit card companies and banks will not stop their unethical practices for the sake of the consumers.
Several banks are still spending large amounts of lobbying money trying to halt this legislation, despite public outrage about the bailout money fiasco several months ago. These banks are attempting to make it easier on the credit card industry by watering down the Credit CARD Act’s provisions. This is an indicator that the credit card companies and the banks have abused their credit card practices and screwing the American people in the process for the past two decades.
For more information about the provisions of the Credit CARD Act of 2009: