WASHINGTON, D.C. – Representative Marcia L. Fudge (OH-11) applauded today’s implementation of the Credit Card Accountability, Responsibility, and Disclosure (Credit CARD) Act, which contains several strict protections for consumers, including banning unfair interest rate increases and forbidding abusive fees and penalties by credit card companies.

 "For far too long, credit card companies have abused customers who pay their bills on time. I co-sponsored the Credit CARD Act out of a commitment to my constituents who have been subject to the highest amount of debt in our nation’s history" said Rep. Fudge. "During this economic downturn, many families have had to turn to credit cards simply to survive. Ending these predatory practices will help our friends and neighbors weather this recession."
 
The overwhelmingly bi-partisan effort was signed into law on May 22, 2009. Some of its provisions went into effect in August of last year, but the law’s strongest consumer protections go into effect today, including measures which:
·         Prohibit arbitrary interest rate increases and universal default on existing balances;
·         Prohibit issuers from charging over-limit fees unless the cardholder elects to allow the issuer to complete over-limit transactions;
·         Require payments in excess of the minimum to be applied first to the credit card balance with the highest rate of interest;
·         Prohibit issuers from setting early morning deadlines for credit card payments;
·         Prohibit interest charges on debt paid on time;
·         Require issuers extending credit to young consumers under the age of 21 to obtain an application that contains: the signature of a parent, guardian, or other individual 21 years or older who will take responsibility for the debt; or proof that the applicant has an independent means of repaying any credit extended; and
·         Protect recipients of gift cards by requiring all gift cards to have at least a five-year life span, and eliminates the practice of declining values and hidden fees for those cards not used within a reasonable period of time.

Additional consumer protections will go into effect this coming August to rein in penalty fees credit card companies impose on customers.
 
To learn more about the Credit CARD Act click here.