How the New Credit Card Act of 2009 Can Help You – Part Two

Here are some details about the Credit Card Accountability, Responsibility and Disclosure Act of 2009 (CARD):

Stops double-cycle billing

Finance charges won’t be based on the current and previous balance. Interest will be based only on the debt already paid in the previous month.

Payment allocation

Instead of payments being applied first to balances with a lower interest rate, the new law will require that payments be applied to those with a higher interest rate. But this will only be applied if the payment made is above the minimum required.

Notices

Statements were usually sent 14 days before the due date. Under the new law, that period is now set at 21 days. This new period took effect August 20, 2009.

Gift cards

Gift cardholders now have more protection under the new law. Gift cards must now be usable for at least five years. Even better, inactivity fees can’t be assessed, much less applied until the card has not been used for a whole year.

Many of these provisions are a welcome addition to debt relief actions, as they will give people more time to act on card concerns.

Read up on more details about the credit card act of 2009 and its “debt relief” guidelines in the first part of this article.

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