The credit card Act of 2009 that is being proposed by the federal government has attracted a lot of criticisms from both sides of the fence. Regardless of these statements being positive or negative, the 2009 Credit Card Act is, by far, the largest reform that has ever been imposed on the industry. This move is aimed towards more efficient and more reliable consumer protection. However, this move could mean some expenses for certain credit cardholders ¨C especially the ones who have good credit standing.
The economic recession has certainly pushed a lot of American to use plastic more than cash, especially for major purchases. With credit cards, you get more leeway when it comes to payment, as compared to using cash. Still, with the 2009 Credit Card Act, this convenience will obviously undergo a lot of modifications.
The Credit Card Act is comprised of 33 pages that contain extremely complicated material for Americans who frequently use their credit cards. With that many pages, it is safe to assume and expect that there will be a lot of changes in credit card usage as well as the mechanisms that the credit card industry operates in.
One of the changes is that a person who is below 20 years old will not be issued a credit card without the consent of a co-signer. Before, as long as you are between 18 to 20 years old, you can already apply for a credit card all on your own. This will change as soon as the new Credit Card Act is implemented.
Another relevant change pertains to consumer protection, in the form of allowing the credit cardholder to reject any interest rate hike implemented by his or her bank. When the legislation is implemented in February 2010, credit card companies would then be required to inform their clients in writing of their intentions to increase their interest rates. The cardholders have all the power in the world to say no. This rejection would lead to the closure of the credit account and the cardholder would still be held liable to pay off his or her balance. The main difference is that the cardholder will pay off the balance pegged at the current interest rate.
These are just some of the major changes that credit card companies and consumers can expect, come 2010. There's lot of good news for consumer protection indeed. The bad news is that consumers who have good credit will find it a lot more difficult to find cards that offer very low promotional rates. Another thing to watch out for would be annual fees. Currently, credit card companies have stopped charging high annual fees, but with the coming changes of the Credit Card Act, they might decide to bring those back, to offset difficulties they might face.