The “Other” Provisions of the Credit CARD Act

What's Hot

How a Mexican Tariff Will Boost the Cost of 6 Common PurchasesFamily

Report: Walmart to Begin Selling CarsCars

How to Protect Yourself From the ‘Can You Hear Me?’ Phone ScamFamily

Trump Scraps FHA Rate Cut — What Does It Mean for You?Borrow

This Free Software Brings Old Laptops Back to LifeMore

10 Overlooked Expenses That Ruin Your BudgetFamily

Protecting Trump Will Cost Taxpayers $35 MillionFamily

8 Creative Ways to Clear ClutterAround The House

8 Tuition-Free U.S. CollegesCollege

Study: People Who Curse Are More HonestFamily

Tax Hacks 2017: Don’t Miss These 16 Often-Overlooked Tax BreaksTaxes

The 3 Golden Rules of Lending to Friends and FamilyBorrow

Porta-Potties for Presidential Inauguration Cause a StinkFamily

12 Surprising Ways to Wreck Your Credit ScoreBorrow

These Are the 25 Best Jobs in the U.S.Jobs & Work

Most of the attention from the bill has been given to the restrictions on interest rate increases and over the limit fees. However, there are many other lesser-known regulations in the Act that could have far-reaching ramifications for consumers.

Editor’s Note: This post comes from partner site

Thanks to the Credit CARD Act, visitors to national parks can carry licensed firearms beginning on February 22.

It is hard to believe that this unique provision was added to the revolutionary credit card bill passed by members of Congress last May.

Most of the attention from the bill has been given to the restrictions on interest rate increases and over the limit fees. However, there are many other lesser-known regulations in the Act that could have far-reaching ramifications for consumers.

Here is a look at some of those other provisions that take effect on February 22:

  • Young adults who are under 21 will have a harder time building up their credit history. If they do not have a job with enough income, they must get an adult to co-sign. Fewer students will have credit cards and this will represent a major shift in spending patterns among young adults. According to a recent Sallie Mae study, 84% of college students have a credit card and 92 percent of undergraduate credit cardholders charge textbooks, school supplies, or other direct education expenses.
  • The CARD ACT takes a stand against targeting students for credit card offers. Issuers cannot market credit cards within 1,000 feet of a college campus or at college sponsored events. Issuers must also disclose their agreements with colleges and universities.
  • The CARD Act forces a fairer distribution of payments. The minimum payment is still applied to the balance with the lowest interest rate. If a cardholder pays more than the minimum payment, the remainder will be applied to the balance with the highest rate.  This could be very beneficial to those consumers who always carry a balance but only if you pay more than the minimum payment each month. However, some issuers have doubled the monthly minimum from 2.5% to 5% during the past year for some cardholders. So it may be more difficult for these consumers to realize the benefit from this provision,” says Bill Hardekopf, CEO of and author of The Credit Card Guidebook.
  • Due dates for monthly payments will be more standardized and predictable. The due date must fall on the same day each month. If that date falls on a weekend or holiday, payments are credited on the next business day without a late penalty.  Consumers cannot be charged a fee for paying their bill unless they choose an expedited payment.
  • Your statement must clearly explain how long it will take to pay your balance if you only make minimum payments. It must also state how much you need to pay each month in order to eliminate your balance in three years.
  • The CARD Act adds some restrictions to rate increases, but your APR can increase if you have a variable rate card and the card’s index increases. Issuers do not have to give you a 45-day notice if this is the reason for the rate increase.
  • The CARD Act softens the penalty for late payments. If you are more than 60 days late for a payment, your APR can be increased. But if you have six consecutive months of on-time payments, your APR has to be restored to its previous level. Some issuers are changing the name on this from “default pricing” to “penalty pricing.”
  • The CARD Act does prohibit over the limit charges unless a consumer “opts in” to allow these transactions to go through and pay the penalty. Cardholders can opt-in orally, in writing or electronically. This can be revoked at any time. Those that opt in can only be charged one over the limit fee per billing cycle if they exceed their limit, not multiple fees.
  • Proof of income is required for new credit. Consumers must prove their ability to make required payments before they can open a new credit card account or increase the credit limit for an existing credit card account. Issuers must consider the ratio of debt obligations to income, the ratio of debt obligations to assets, or the income the consumer will have after paying debt obligations
  • Fees on secured cards cannot be greater than 25% of the initial credit limit.
  • Those companies advertising a “free” credit report have to explain how consumers can obtain a free credit report once a year from each of the credit bureaus
  • Issuers must provide toll-free numbers for consumers to get information about nonprofit credit counseling and debt management assistance.
Stacy Johnson

It's not the usual blah, blah, blah

I know... every site you visit wants you to subscribe to their newsletter. But our news and advice is actually worth reading! For 25 years, I've been making people richer without making their eyes glaze over. You'll be glad you did. I guarantee it!


Read Next: 6 Presidents Day Sales You Should Know About

Check Out Our Hottest Deals!

We're always adding new deals and coupons that'll save you big bucks. See the deals to the right and hundreds more in our Deals section.

Click here to explore 1,853 more deals!