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An introduction to the CARD Act

No matter their credit history or limit, credit card customers across the state of Florida and the entire nation have rights as consumers. Unfortunately, however, many people are not familiar with federal guidelines mandating credit card practices and consumer protections. Learning a little bit about the Credit CARD Act can go a long way to ensure that one's rights as a consumer and borrower of credit are legally safeguarded at all times.

The Consumer Financial Protection Bureau explained that the Credit Cardholders Bill of Rights, otherwise known as the Credit CARD Act, was enacted by President Obama in 2009. The federal legislation features two primary objectives: transparency and fairness. The primary provisions of the law mandate that credit card fees and rates be easily accessible to consumers. They also prohibit exploitative or biased practices on the part of credit lenders. Abusive practices could include but are not limited to imposing over-limit penalties on accounts or dramatically increasing the interest rate on a credit balance.

In order to promote credit card company accountability for industry practices, the Board of Governors of the Federal Reserve System notes that the CARD Act stipulates guidelines for companies to follow. For instance, credit card companies are now obligated to provide consumers with 45-day notice before doing anything from increasing interest rates to changing the terms of a card. Similarly, credit card companies are prohibited from increasing the interest rate on an existing credit card within the first year of the account opening. Several other CARD guidelines regarding billing dates and cycles are in place to discourage unfair practices as well.

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