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Credit Card Crackdown

Friday, May 22, 2009, President Obama signed a bill into law that will make it tougher for credit card companies to raise fees and interest rates.

The Credit Card Accountability Responsibility & Disclosure Act of 2009 will go into effect in February 2010 and will not be retroactive, which means consumers could still face rate hikes until then.

Under this new law, it’s harder for people under 21 to get credit cards, and it bans rate hikes unless a consumer is more than 60 days late of a payment. Then it would also restore the previous rate after six months if minimum payments are successfully made. Consumers also have the right to receive 45 days’ notice and an explanation before their interest rates increase.

Obama says the bill is not intended to help those who buy more than they can afford but to protect consumers from surprise charges during difficult times.

Some in the financial services say this will exacerbate the credit crisis and possibly force banks to drop risky credit card holders. The American Bankers Association suggested this legislation could lead banks to reinstate annual fees and higher interest rates on all card holders.

Around 80% of Americans have a credit card, and at least half of those carry a balance on their cards. During a time when people are having a harder time making payments and walking away from debt, these new laws will hopefully provide a little relief or at least relieve the pressure on those who are being unfairly penalized with hiked up rates.

United Credit Source is committed to looking out for your best interests during this difficult economic time. We want you to know your rights and act responsibly, but we’re also here to help you improve your credit so you can start over again with an improved outlook and better knowledge. Let us empower you to improve your financial outlook and stability.