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Credit Card Applications » News » Other » Banks and Credit Firms Will Not Comply with Credit Card Law

Banks and Credit Firms Will Not Comply with Credit Card Law

December 26, 2009
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About 75 percent of US banks will not comply with new rules in the recently-enacted Credit Card Accountability, Responsibly and Disclosure (CARD) Act, a law that regulates card issuers on increasing and imposing fees.

In a survey conducted by the Federal Reserve, most banks and credit companies claimed they are not yet ready to comply with this new regulation until February 2010.

On the other hand, the 25 percent assured the federal agency that they will be ready to comply with rules by the end of 2009.

In a different survey conducted by the federal agency, it found out that 15 percent of banks and financial companies have employed stiff rules for credit card accounts.

About 45 percent bank-respondents admitted they are planning to increase minimums for credit scores, and 40 percent are contemplating to raise contract rates and fees once the new credit law is implemented.

The credit card reform act was signed into law by President, Barack Obama, on May. The law was supposed to implement on February next year to give banks and financial institutions more time to alter their policy that is congruent to these new credit card regulations.

Before implementation of the law, card issuers have rushed in changing and rewriting contracts. It allowed the credit companies to raise interest rates, apply penalty fees for late payments or over-limit transactions. They also massively reduced consumers' credit lines and closed inactive accounts.

The banks' actions have prompted Congress to pass a bill, expediting the implementation of new regulations on credit. The new card law will now take effect on December this year.

Once implemented, Jeanne Hogarth, Federal Reserve Board manager division, advised cardholders to read every mail they will receive from their credit companies to ensure that their rights are not being violated.

Some of the rights in the card reform act include, consumers have the privilege to reject the rate increases, especially when they are paying balances. Consumers should be notified 45 days before changing interest rates. Moreover, banks are also prohibited to apply double-cycle billing.

Under this same rule, credit card companies shall require a co-signer before approving the application of a consumer who is 21 years old or below. Card issuers are not allowed to solicit on school or near campuses. The Board of Regents must by notified by universities with any agreement it enters with credit card firms.

The law encourages the low introductory rate to students applying for a card, but it prohibited banks and card issuers to give gifts, such as T-shirts, mugs, caps to minors.

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  • Larry
    With the Virgin / Barclaycard signature offer, there seems to be some consumer deception or maybe even outright fraud goin on.   I decided to jump on this offer..  read all the info on it..  was approved for their platinum card, paid the fee, then was only awarded 10,000 points instead of the advertised 20,000.   When i inquired about the less than advertised bonus points, Barclaycard claims only Signiture Visa cardmembers get the 20,000..  as a platinum cardholder, you don't qualify for that level of bonus, so you get 10k instead.   Well, in their current ongoing promotions, it states plain as day that....    Applicants approved for the Visa Signature or Platinum Card with $49 annual fee will receive 20,000 Bonus Points awarded to your Virgin America Rewards Account at the close of the first billing statement in which you make your first purchase or balance transfer (that is not returned or rescinded) and have paid the Annual Fee on the account (and such fee is not rescinded). They don't mention anything about a separate program for platinum cardholders..  However, trying to get someone to resolve this issue with either Virgin or Barclaycard seems to be rather impossible.. Seems to me they're simply drawing people in with the fraudulent offer, then simply saying, oh, we're sorry you don't qualify..  but thanks for signing up for our garbage credit card with insane fees..   
  • CreditLandCom
    Thank you for sharing your experience with us. We have reviewed this offer and you are correct, nowhere it is mentioned that 20,000 Bonus can become a 10,000 Bonus all of a sudden... We will mention this in our review of this card so others can make an informed decision. Another way to get Virgin miles is to get an American Express charge card: The Business Gold Rewards Card® now offers 50,000 Miles, though you do have to spend $5,000 in the first three months of card membership to get it. It also has $0 introductory annual fee for the first year, then $175. http://www.credit-land.com/details/the-business-gold-rewards-card-from-american-express-open.php Premier Rewards Gold Card now offers 25,000 Miles, though you do have to spend $2,000 during your first three months of Card membership. It also has annual fee of $0 for the first year, then $175. http://www.credit-land.com/details/american-express-premier-rewards-gold-card.php While we do not know If any of these offers make sense to you, we are at least sure that you will get advertised bonus in full if you decide to get them... Conversion rates for Virgin America are: 100 Elevate Points = 200 Membership Rewards® Points All the best.
  • Deborah Ellsworth
     would very much like to start a new credit history  by making payments on time I would tohave a credit card that is NOT PREPAYID! I don't need a card with a high limit just something to start a new credit history. Thank You Deborah Ellsworth
  • Deborah Ellsworth
    I would very much like to start a new credit line to get back on track. I DO NOT WANT A PREPAID CARD!! This new credit card if I am approved does not have to hace a high limit just something for me to start over again and prove myself ThankYou. D Ellsworth
  • Miss Edna
    there is a huge problem with the RFIP chip: it is easily compromised. There are already 'readers' in the form of what looks like a cellphone in a case, that scans all the info in the chip by merely walking near a person -- this 'reader' penetrates leather, cloth, spandex, etc. The only thing it will NOT penetrate is METAL. Perhaps one has seen commercials touting metal credit card cases. Here is my hint for a free fix: cut a piece of aluminum foil or use the foil that is used to keep foods fresh, like coffee. Cut it so that when folded once, it forms a sleeve for your credit card. place the credit card in the sleeve, then place the sleeve in your wallet.
  • Robin Parks
    I am looking to apply for the AARP Visa signature card from Chase that offers $100 after spend $500 in first 3 months, no annual fee and 0% interest first year; I don't want to mail in offer because of having to write in Social security #. Can you direct me to the proper on-line site?
  • CreditLandCom
    The Chase bank cards are not currently available at Credit-Land.com, but you can consider applying for the Citi® Dividend Platinum Select® Visa® Card - $100 Cash Back. The cards has similar terms and cash back program.
  • Becky
    This is Becky Now what do I do just waqit for acard to come to me?
  • CreditLandCom
    Once you have applied, you should receive a letter within 10 business days letting you know if you were approved and when your card will arrive. If you did not receive any letter or notification from the issuer, you should contact them directly. Also, you should contact the issuer if you’ve been waiting for your credit card longer than 30 days. Since we are not a bank and don’t issue credit cards, we cannot give you any information about your application or credit card.
  • SavingStar
    Thank you for posting about SavingStar. Just to clarify one sentence in your article, we have over 5 million members (not 500). Thanks, Josh
  • CreditLandCom
    Sorry for the misprint. We’ve corrected the sentence. Thank you for noticing that.
  • Eric
  • John Stifler
    I think almost all people that familiar with internet, will hardly fall to these scams, but for now, I think people that use computer but don't familiar with internet things, and they has a phone line at their home, they should be warned more than internet users. I think senior people usually got scammed by these kind of "tech support" scams. Found so many reports about them since years ago at complain board sites like http://callercenter.com. We as younger, and know more about this stuff, should help and share information to they who needed it, especially older people.
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