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WASHINGTON DC -- Congresswoman Suzanne Kosmas, D-New Smyrna Beach (FL-24), announced that new, common-sense rules will go into effect today help protect credit card holders from a wide range of unfair practices.
Key protections outlined in the Credit CARD Act, which Kosmas helped pass last year, implement tough regulations on the credit card industry and empower consumers by equipping them with the tools they need to manage their own credit.
"At a time when so many Central Floridians are struggling to make ends meet, these regulations are an important step toward helping ease the burden on families and small businesses," Kosmas said Monday in a written statement from Washington. "These common-sense provisions will ensure credit card companies provide reliable, transparent information so consumers have the tools to make smart, informed decisions about their personal finances."
The Credit Card Accountability, Responsibility and Disclosure Act of 2009 (Credit CARD Act) is legislation that levels the playing field between card issuers and cardholders by applying regulations to increase consumer protections against unfair, deceptive, and anti-competitive credit card practices.
The Credit CARD Act was signed into law by the President on May 22.
Provisions that become effective today include:
* Prohibits arbitrary interest rate increases and universal default on existing balances;
* Prohibits issuers from charging over-limit fees unless the cardholder elects to allow the issuer to complete over-limit transactions, and also limits over-limit fees on electing cardholders;
* Requires payments in excess of the minimum to be applied first to the credit card balance with the highest rate of interest;
* Prohibits issuers from setting early morning deadlines for credit card payments;
* Prohibits interest charges on debt paid on time (double-cycle billing ban);
* Requires issuers extending credit to young consumers under the age of 21 to obtain an application that contains: the signature of a parent, guardian, or other individual 21 years or older who will take responsibility for the debt; or proof that the applicant has an independent means of repaying any credit extended;
* Protects recipients of gift cards by requiring all gift cards to have at least a five-year life span, and eliminates the practice of declining values and hidden fees for those cards not used within a reasonable period of time.
For more detailed information on the new consumer protections for credit card users, visit The Federal Reserve's Consumer Information website