The Credit Card Accountability, Responsibility and Disclosure (CARD) Act of 2009’s Juicy Tidbits

by Ron Haynes

The tsunami of anti-credit card sentiment has finally been heard in the halls of Congress. In one broad sweep, legislators have reined in the “anything goes” attitude of credit card companies when it comes to zapping customers with fees and hidden costs. Or have they?

Read the text of H.R. 627 in full.

In the case of any credit card account under an open end consumer credit plan, a creditor shall provide a written notice of an increase in an annual percentage rate (except in the case of an increase described in paragraph (1), (2), or (3) of section 171(b)) not later than 45 days prior to the effective date of the increase.

Call me a skeptic, but my prediction is no real change. The credit card companies will simply bury the notification of increases in a flurry of blurry text on the back of a statement. I know, I know, they’re supposed to use only size 12 font but when there’s 34 pages of it … who decides if it meets the requirements of “conspicuous?”

(1) PROHIBITION ON DOUBLE-CYCLE BILLING AND PENALTIES FOR ON-TIME PAYMENTS- Except as provided in paragraph (2), a creditor may not impose any finance charge on a credit card account under an open end consumer credit plan as a result of the loss of any time period provided by the creditor within which the obligor may repay any portion of the credit extended without incurring a finance charge.

“DOUBLE-CYCLE BILLING” refers to the practice where a company averages your last two month’s balances to calculate your interest charges for the current month. My prediction: significant change here, unless you bounce a check. Then the government will “loose the hounds” on you. What I don’t understand is, if something is wrong, it’s wrong. Why allow double cycle billing under ANY circumstances?

In the case of any credit card account under an open end consumer credit plan under which an over-the-limit fee may be imposed by the creditor for any extension of credit in excess of the amount of credit authorized to be extended under such account, no such fee shall be charged, unless the consumer has expressly elected to permit the creditor, with respect to such account, to complete transactions involving the extension of credit under such account in excess of the amount of credit authorized.

I like this provision.  If the credit card company charges over limit fees, consumers can tell their credit card issuer to refuse transactions that will put them over their credit limit. This provision make a “limit” a real limit. Prior to this, a limit was just the point at where extra fees were added.

Upon receipt of a payment from a cardholder, the card issuer shall apply amounts in excess of the minimum payment amount first to the card balance bearing the highest rate of interest, and then to each successive balance bearing the next highest rate of interest, until the payment is exhausted.

Great idea for the consumer. All payments must be applied to the highest interest rate first. This actually is option 3 in my 3 Debt Payoff Strategies! By applying payments to the highest interest rate first, the consumer will pay less interest.

The payment due date for a credit card account under an open end consumer credit plan shall be the same day each month.

Now the credit card companies can’t change your due date and zing you with late fees.

Time To Make Payments- A creditor may not treat a payment on an open end consumer credit plan as late for any purpose, unless the creditor has adopted reasonable procedures designed to ensure that each periodic statement … is mailed or delivered to the consumer not later than 21 days before the payment due date.

Is three weeks enough? I’m not sure it is but this is a good start.

A card issuer may not open any credit card account for any consumer under an open end consumer credit plan, or increase any credit limit applicable to such account, unless the card issuer considers the ability of the consumer to make the required payments under the terms of such account.

How is a company supposed to know if I can repay that account? This is one of those “nanny state” problems that always arise when the government is involved. What constitutes “considering?” All that’s probably going to be considered is the credit score.

Repayment information that would apply to the outstanding balance of the consumer under the credit plan, including–

(i) the number of months (rounded to the nearest month) that it would take to pay the entire amount of that balance, if the consumer pays only the required minimum monthly payments and if no further advances are made;

(ii) the total cost to the consumer, including interest and principal payments, of paying that balance in full, if the consumer pays only the required minimum monthly payments and if no further advances are made;

(iii) the monthly payment amount that would be required for the consumer to eliminate the outstanding balance in 36 months, if no further advances are made, and the total cost to the consumer, including interest and principal payments, of paying that balance in full if the consumer pays the balance over 36 months; and

(iv) a toll-free telephone number at which the consumer may receive information about accessing credit counseling and debt management services.

This is the best part of the whole bill and quite honestly, if credit card companies had adopted this policy on their own, most of the other parts of this bill would have never been an issue. The whole problems has been that credit card companies shrouded their calculations, fees, and penalties in legal jargon and skewed the agreement too heavily in their favor.

Overall, the bill appears to turn things more in the favor of the consumer, but if it’s so good, if it’s so needed, if it’s so important to help consumer, why does the government wait to implement the bills provisions for NINE MONTHS?

About the author

Ron Haynes has written 988 articles on The Wisdom Journal.

The founder and editor of The Wisdom Journal in 2007, Ron has worked in banking, distribution, retail, and upper management for companies ranging in size from small startups to multi-billion dollar corporations. He graduated Suma Cum Laude from a top MBA program and currently is a Human Resources and Management consultant, helping companies know how employees will behave in varying situations and what motivates them to action, assisting firms in identifying top talent, and coaching managers and employees on how to better communicate and make the workplace MUCH more enjoyable. If you'd like help in these areas, contact Ron using the contact form at the top of this page or at 870-761-7881.



You’ve done quite a study it seems, and need to post this all over the world. And anytime the government says they are here to help…well it makes me a tad itchy. My favorite quote is from none other than Ronald Reagan…”The most terrifying words in the English language are: I’m from the government and I’m here to help.”


Thanks for explaining it,Ron!
I wish they had addressed one problem I had with a credit card company. I paid my monthy payment on time….and thought I’d save myself a bit of interest by paying my next payment early. So…my July 10th payment was paid on June 26th! So they received no payment in July…and it was considered late! Yes…LATE! They even charged me a late fee!
So now, I am careful to make sure they get a payment each month….no trying to pay early anymore!


i am over paid my credit card, but i never get back my portion the credit card company own me! so how long it take that over paid send it back to me? will I earned some interest on that over payment portions?

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