The Credit Card Accountability, Responsibility and Disclosure (CARD) Act

by Mark Brinker

President Obama signs the Credit Card Accountability, Responsibility, and Disclosure (CARD) Act of 2009 

President Obama signed the Credit Card Accountability, Responsibility and Disclosure (CARD) Act on May 22, 2009, which provides a sweeping overhaul of how consumer credit is handled by credit card companies. The bill provides strong and reliable protections for consumers against what some have considered unfair and deceptive practices by certain financial institutions.

The new law will go into effect in about 9 months. Below are the key elements of the bill:

  • Credit card companies must notify their customers in writing of any rate increase or any other significant change to the card agreement at least 45 days in advance of the change. No more sudden changes.
  • Monthly billing statements will have to be mailed at least 21 days before payment is due. In addition, the new law ends the practice of shifting payment due dates.
  • Monthly billing statements will be required to tell credit card holders how long it will take to pay off a balance and what it will cost in interest if they only make the minimum monthly payments.
  • Bans arbitrary rate increases on existing balances and severely restricts retroactive rate increases due to late payment.  After the first year, however, the card issuer can raise the rate on future purchases with 45 days advance notice.
  • Places limits on fees and penalty interest.
  • Every credit card company will have to post its credit card agreements online.

President Obama summarized these new changes by saying, “We’re not going to give people a free pass; we expect consumers to live within their means and pay what they owe.  But we also expect financial institutions to act with the same sense of responsibility.”

For more in-depth information on this new bill, please visit:

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