Eddie Patel, Inc.

So What is the Credit Card Accountability Act?

On May 22, 2009, President Obama signed into law the Credit Card Accountability Responsibility and Disclosure Act of 2009 (the Credit CARD Act of 2009).

The Act requires that creditors give consumers written notice 45 days in advance of any rate increase or other significant account change. Consumers must also be given notice of a right to cancel the account prior to the change, and cancellation cannot be construed as a default or trigger an obligation to immediately repay the obligation in full.

What Does This Mean for You?

Perhaps most importantly--from a consumer's standpoint--creditors are generally prohibited from increasing the annual percentage rate (APR) applicable to an existing balance on an open end consumer credit card account unless the account falls 60 days past due, or other specific conditions apply. If the APR is increased because the account falls 60 days past due, the creditor must inform the consumer that the rate increase will be terminated (and the rate restored to what it was before the increase) once the creditor receives the minimum payments due in a timely fashion for six months.

When Will the Act be in Effect?

The sections of the Credit CARD Act of 2009 concerning notification requirements take effect 90 days after the date of enactment. The remaining portions of the Act take effect in February, 2010.