Credit Card Reform Act

The common consumers of United States greeted a very important legislation which is officially known as Credit Card Accountability Responsibility and Disclosure Act of 2009 or Credit Card Act of 2009 and for us common consumers, it is simply the credit card reform act which is all set to reform and improve the credit card industry. Though the act was passed in 2009, there are several provision which were enforced in 2010, leading to the name, credit card reform act of 2010. The act started a revolution of accountability just in time before the economy takes an even worse plunge (and before the elections come in). The following paragraphs discuss the provisions of this legislation and put forth some important facts that are related to the act.

Credit Card Reform Act: A Law of Change

This act would principally govern the working of about 576 million something credit cards that are in circulation in the United States economy. The act is a great initiative by the Obama administration to improve status of credit card debt in the entire nation.

Some essential facts and provisions of the act are:

1. Bans on Unfair Fees and Related Fee Traps
Later fees, fines and other charges are often imposed in a single credit card processing cycle. These fees were often unfair, not to mention staggering. A good practice among the credit card companies that would be enforced as a result of the act is that the consumers will have 21 calendar days from the date of mailing to pay the bill. The act also bans all the double billing process that is the same fines will be imposed again and again upon successive billing cycle. The companies will also have to take permission of the consumer before including above the limit transactions in credit card processing. Subprime fees would be restricted by the government and low limit credit cards would not have a very high interest rate but rather a proportionate APR and fee rate will be followed.

2. Billing and Disclosure Compliance
The act also enforces compliance upon some of the disclosure procedures. The credit card prospectus/quotation, bills and modification letters are affected by this provision. The basic feature of the provision of this compliance is that all the facts that revolve around the credit card and its transactions should be highlighted and explained in simple words. Apart from that the reason of the bill being charged should also be disclosed. The companies will also have to explain the consequences of credit decisions to the consumers. The companies will have to show the cost of paying of existing balance in 36 days (owed amount plus rational interest).

3. An Age of Accountability
Public disclosure of all the billing cycles and usable soft copies and copies of credit card contracts on the Internet. Regulators and consumer advocates would have a free access to these contracts. The regulators will have to report to the congress about the enforcement of the credit card protection. The companies not adhering to these requisites, will be fined, heavily.

Apart from these requisites and accountability the act also aims at protecting the young generation's interests and college and University students are being offered certain amount of protection from unfair trade practices.

Overall, one can conclude that the act focuses on banning increases in rates, prevents fee traps, makes disclosures less complex, increases accountability and offers protection to the student community. I hope that the information on credit card reform act is resourceful. Good luck.