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Since the Credit Card Accountability, Responsibility, and Disclosure (CARD) Act of 2009 was passed into a law, a lot of people expects that the new law will protect them from unreasonable terms and conditions imposed by credit card issuers.

But did you know that in order to benefit from the new Credit CARD law, you need to be aware of its exact provisions and act accordingly to avoid unfair treatment from your credit card issuers? On this article, let us discuss some of the major changes made to Credit CARD law along with tips on how you can benefit from your privileges as a credit cardholder.

Regarding The 45 Days Notice

Some people may get the false idea that the Credit CARD Law completely prohibits credit card issuers from changing their interest rates or imposing APR increases. But that is not true! Under the new law, credit card issuers still have the option to raise their interest rates as long as they can provide a 45-day advance notice to their customers. Yes, all it takes is a letter from your issuer informing you about your up-coming rate increase.

What can you do if you receive such notice from your credit card issuer? First, you can call up your issuer and request if you can retain your present rate. If you have been a long time customer and a good payer, your credit card company may give in to your request just to keep you with them.

Nonetheless, if your issuer refuses to retain your present rate, you also have the option to “opt out” and cancel your account before the actual increase takes effect. But before taking any drastic action, check your credit card account and see to it that you do not have an existing balance. Keep in mind that cancelling an account with unpaid charges can damage your personal credit rating. Also, if it is your oldest credit card, closing that account would mean erasing some of the oldest parts of your credit history.

Yes, the new has lengthened the advance notice period to give cardholders the chance to “opt out” or complete their payments before the new rate becomes effective. For this reason, credit cardholders are advised to be alert about notices or mails sent by their issuer. If you miss the alert, you may find out too late that an increase in your rate has been bound to happen.

Interest Rate Hikes Without Notice

There are certain conditions where a credit card company can implement an increase on your interest rate without the need to send advance notice. These conditions are:

• When the introductory rate expires

• When your card has a variable rate

• When you have fallen behind your payments for more than 60 days

To avoid unpleasant surprises, carefully study your credit card Agreement before signing up your application. If your chosen card has a variable rate, increases are to be expected since the APR is directly dependent on the market’s Index Rate.

If you have chosen a credit card with an introductory APR, check how much the regular rate would be when the introductory period ends. Check the exact length of the introductory period so you can complete your payments while the low APR still applies.

Lastly, always be prompt with your payments to avoid the risk of bad credit. Remember that your issuer can increase your APR without notice if you fall behind your payments for more than 60 days.

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