How the Credit Card Act of 2009 Affects Consumers

HR627 is the new credit card bill that was passed as the Credit Card Accountability, Responsibility and Disclosure Act of 2009. President Obama signed the bill into law recently. The House enacted the Senate’s presentation of this Act. Its purpose? “To amend the Truth in Lending Act to establish fair and transparent practices relating to the extension of credit under an open end consumer credit plan, and for other purposes.”

It is human nature to want things that we cannot readily afford. It is also human nature to protect. The bill is supposed to serve as a means to end the seemingly unfair rate hikes and hidden fees; to not promote them. Lately, people are being bombarded with credit card offers.

Some card issuers have even changed the minimum payment from 2 percent to 5 percent. Other credit card issuers have chosen to increase credit card interest and balance fees. Further, consumer-borrowing amounts are being downsized by the credit card industry, now.

The Credit Card Act of 2009 was introduced in January of this year. It is slated to take effect in February of 2010, and is supposed to protect consumers from bad actions, unfair fees, and higher credit card rates, which have already increased. If the credit card industries know what the purpose is for the bill and what the protectors are aiming to do beforehand, naturally they would react the way they have. The smart thing for the consumer to do would be to wait until the bill goes into effect before even applying for a credit card so as to avoid additional or hidden fees and charges. However, this would only help the consumer that has not already applied for or been offered a credit card, or the consumer that does not already have a credit card; and hence, the obligation to pay for it. Another alternative to not being able to pay the debt(s) would be bankruptcy, so it seems. Should we expect to see an even larger amount of bankruptcy claims as a result of this Act?

“The Bill’s Sponsor is Rep. Maloney, Carolyn B.[NY-14]
Major Action: Became Public Law No: 111-24
ONE SUMMARY AS OF:
5/20/2009–Public Law.
Credit Card Accountability Responsibility and Disclosure Act of 2009 or the Credit CARD Act of 2009 – (Sec. 2) Authorizes the Board of Governors of the Federal Reserve System (Federal Reserve Board) to issue rules and publish model forms to implement this Act. (Sec. 3) This Act becomes effective nine months after its enactment.”