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The Card Act – Three Years Later



Consumer Action recently released results from a survey taken by 706 consumers on their experiences with credit card companies since the implementation of the Credit Card Accountability, Responsibility and Disclosure (CARD) Act. Their findings were that although consumers still have issues, credit card complaints did not make Consumer Action’s Top Ten list of consumer complaints. The CARD Act is a consumer success story. Thanks to the changes in the way late fees can be applied and when interest rates can increase, consumers have saved hundreds, if not thousands of dollars, which allows them to pay off their debt quicker. 


Maximize the benefits of the Card Act and stay on track to use credit wisely through these important steps.

Make more than the minimum payment

Your bill must now include information on how long it will take you to pay off your balance if you only make minimum payments.  It will also tell you how much you would need to pay each month in order to pay off your balance in three years.  For some, their budget cannot support that big a payment, but by paying anything over the minimum each month you are guaranteed to pay the card off quicker and pay less in interest.

Pay on time, every time

The CARD Act requires card issuers to wait until payments are 60 days late before charging penalty interest rates and those can only be applied to new purchases. The good news is, if you make on time payments for six consecutive months, the interest rate reverts to the original rate. To get yourself back on track to receive that original rate, make a budget. Allocate every dollar that comes into your household to an expense. Forego any frivolous spending and make it a priority to ensure your payments arrive to your creditors on time. Making payments on time has an added benefit- your credit score could go up! Thirty-five percent of your score is based on payment history, so by making your payment on time, every time, and your score should increase. 

Learn cash management before acquiring credit

Creditors can no longer offer college-age students, age 18 and up, a credit card without sufficient independent income to repay their debt up to their credit limit.  In the past, college campuses were crowded with credit card companies offering accounts to students, some of whom had no income to support the use of credit cards. In turn, they were graduating with high credit card balances that they struggled to pay. During this time, it is a great opportunity for students to learn more about credit and how to maintain their checking accounts before taking on the management of a credit card. 


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