New legislative measures aimed at helping protect consumers from credit card debt have been signed into law by Congress. The Credit Card Accountability and Disclosure Act of 2009 will go into effect on February 2010.
H.R. 627-15 was conceived to aid consumers in managing their credit cards. It also prescribes protective measures for cardholders against excessive service fees and penalties slapped on by credit card companies.
One section of the bill is dedicated to the protection of consumers under the age of 21. Section (B)(i-ii) of the bill specifically states that an applicant for a credit card who has not yet reached the age of 21 must have a cosigner to vouch for him or her. The bill also requires that an applicant present proof of sufficient income in the absence of cosigner.
The new legislation is set to protect new credit card applicants and was devised out of the current economic situation.
Todd Stacy, the press secretary of Alabama’s Gov. Bob Riley, says that the new law was borne out of the need for stringent measures given the realization of many Americans that “money doesn’t grow on trees.”
Another safety measure prescribed by the bill will give consumers the opportunity to “opt in” for a fee when they reach their credit limits. Simply put, the consumer’s credit card will be declined unless the cardholder chooses to pay a fee for reaching his or her credit limit.
In previous years, credit card companies usually decline cards that have reached their limits. However, recent years have seen more companies allowing customers to overcharge their cards. Cardholders are slapped with fines, though.
Jamie Grady, a representative for Wells Fargo, says that the company supports the legislation protecting consumers.
Several other measures will also take root with the law going into effect next year. These include a 45-day notice prior to credit card interest rate hikes, the posting of credit card agreements on the internet, and the payment of bills online or by phone by consumers, without any extra charges.