CARD Act of 2009 *** Important Facts

Credit Card

Accountability

Responsibility and

Disclosure Act of 2009

CARD Act Regulation Effective Dates

August 20, 2009

· More advance notice of any significant changes to terms of credit card account, 45 day advance notice of any significant adverse change to your account.

o Significant does not include Closing the Account or Reduction of Credit Limit

· Requires that Credit card issuers mail statements at least 21 days prior to due date, previously 14 days.

February 22, 2010

· Interest Rate Increases

o Consumers who are casually delinquent will not see interest rate increases

o Consumers who are 30 days past due will not see an interest rate increase

o 60 days or more late will see an interest rate increase

§ If pays on time for 6 consecutive months can earn the lower rate back

· Restrictions on over limit fees

o Act automatically opts out all consumers from allowing cards to be charged above and beyond the limit. Unless a consumer calls and requests to opt in again and receive the $39 over limit fee.

o Over limit transaction is allowed to increase your interest rate after the first year

· Interest rate can only increase on new purchases, not existing

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o > 1 year interest rate can increase, but only affect new purchases. Existing purchases will continue to be calculated at the old interest rate

· 3 Reasons interest rates can increase prior to 1 yr after opening account

1. Promotional rate can increase after promotion has ended or when you are delinquent

2. If interest rate is variable then interest rate can increase

3. If you fail to payback timely within your Debt Management Plan, DMP, then your interest rate can increase

· Payment option flexibility

o Any payment received by 5pm local time has to be credited as being received that day.

o If you walk into a branch or pay by phone they can no longer charge you a fee

· Consumers 21 and under

o Consumers who are under 21 will run into more problems getting qualified for a credit card

o Need a co-signer OR Must have a job

· Payment Allocations

o Any overage of the minimum payment will be applied to the balance of the higher interest rate, previously was applied to balance at lower interest rate

· Double Cycle Billing – no longer allowed

August 2010

· Gift Cards – currently lose value after 12 months

o Gift Cards can no longer expire or charge inactivity fees for 5 years after issue date

Notes

· Debit Card industry is not regulated by CARD Act

· Retail store credit card is not regulated by CARD Act

· Expect the banks to adjust existing fees and create news ones.

o ATM fees may increase

o Cash Advance fees may increase