With online shopping and PayPal accounts becoming more and more popular, it is important to understand the legal terminology behind credit card usage and guarantees. The Credit Card Accountability Responsibility and Disclosure Act of 2009 (or “CARD Act of 2009”) came into existence to protect consumers from hidden fees and terms with their credit cards.
The CARD Act is a federal law that outlines specific practices for credit card issuers to follow when marketing and issuing new cards, along with billing, payment processing, and account maintenance.
Protecting Consumers From Unfair Practices Like Unsolicited Credit Card Offerings
The CARD Act limits credit card issuers from issuing unsolicited credit cards, encourages careful review of the terms of a card, and requires merchants to disclose information about their cards to consumers. It also limits how often issuers can raise interest rates and prohibits them from raising them on existing balances. Additionally, it requires issuers to give 45 days’ advance notice for rate increases, and to post the rate change in the monthly statement.
Protections for Young Adults and College Students
The CARD Act also provides specific protections for young adults and college students. This includes prohibiting issuers from evaluating an application based on the applicant’s income unless the applicant has a steady source of income. It also requires issuers to evaluate applications based on the applicant’s ability to repay. Additionally, it sets a minimum age of 21 to open an account, or 18 if the applicant has steady income or a cosigner over 21 years old.
By providing specific and transparent requirements for credit card issuers, the CARD Act of 2009 allowed consumers to have more peace of mind when using their cards—and continues to protect them to this day.