Other names for this bill...
This bill also is known by its acronym - CARD Act (or Credit CARD Act)
Major provisions of this bill...
This bill outlawed practices that were regularly used by credit card companies to obtain fees from consumers generally considered to be excessive and deceptive.
o Banks now are required to provide a 45-day advance notice of interest rate increases or other significant changes to terms regarding the card's use.
o Banks now must decline a transaction that would cause a customer to exceed their credit limit - rather than approve it and charge a fee. If a customer wants the bank to approve such purchases, they must give the bank explicit permission.
o A fee for exceeding a customer's credit limit can be imposed only once during a billing cycle - not once for each transaction that would exceed the limit.
o Fees such as late fees are restricted to "reasonable and proportional" amounts. Banks cannot charge a fee for inactivity.
o Payment due dates cannot change from month to month. A statement must be mailed at least 21 days before the date payment is due. Also, a bank cannot consider a payment late if it is received before 5 p.m on the due date.
o Monthly bills must include information about how long it would take for the bill to be paid off if only the minimum payment is paid each month.
o Banks now must decline a transaction that would cause a customer to exceed their credit limit - rather than approve it and charge a fee. If a customer wants the bank to approve such purchases, they must give the bank explicit permission.
o A fee for exceeding a customer's credit limit can be imposed only once during a billing cycle - not once for each transaction that would exceed the limit.
o Fees such as late fees are restricted to "reasonable and proportional" amounts. Banks cannot charge a fee for inactivity.
o Payment due dates cannot change from month to month. A statement must be mailed at least 21 days before the date payment is due. Also, a bank cannot consider a payment late if it is received before 5 p.m on the due date.
o Monthly bills must include information about how long it would take for the bill to be paid off if only the minimum payment is paid each month.
Updates
2013-11-07: A recently completed study has shown that these protections are saving Americans more than $20 billion a year. Read our report of the study for more.