Credit Cards

The Credit CARD Act: Enhanced Consumer Disclosures

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Card-act-graphic All week long we've been reviewing the major provisions under the Credit CARD Act and what they mean for you.  So far we've covered the new laws governing interest rates and account changes, fee restrictions, and student credit card protections. Next on the list we're covering the new consumer disclosure rules.

Not only does this section of the law help provide a much-needed level of transparency in regards to the time it takes to pay off credit card debt, it also put an end to one of the most popular (and annoying) marketing campaigns of all time.  You know the one, featuring a group deadbeat 20-somethings living in their parents basement and singing a tune? Yep, thanks to enhanced consumer disclosures, those deadbeat 20-somethings are looking for a new gig.  Here's what the enhanced consumer disclosures mean for you:

  • Your credit
    card statements must now include a minimum payment disclosure that
    explains how long it will take you to pay off your existing balance as
    well as the total cost in interest if you only pay the minimum amount
    due each month. Additionally, your statement must include the monthly
    payment required, and interest cost, to pay off the existing balance in 3
    years.
  • Your credit card issuer must provide easy
    online access to the cardholder agreement for your account. Likewise,
    all credit card issuers are required to submit cardholder agreements to
    the Federal Reserve, which will act as the central repository. Find
    your credit card agreement with the Federal Reserve Consumer Credit Card Agreement Search tool.
  • Companies
    that advertise "free" credit reports must disclose that the report
    being offered is NOT the free credit report provided under Federal law
    at AnnualCreditReport.com. (Read the FTC Amendment)

What you need to know:
If your credit card issuer raises your interest rate, they must tell
you why. This means if the increase is due to market conditions,
increased credit risk due to credit scores, or a decline in credit
worthiness – they must provide up to four the reasons for the increase.
Under separate legislation, issuers will also be required to provide
consumers with the credit score used in making that decision. The
effective date for credit score disclosures has not yet been determined.

How do you feel about the new payment disclosures? Were you surprised by how long it would take to pay off the balance by only making the minimum payment? Do you think the 3 year payment disclosure is helpful? We want to hear what you have to say.  Share your thoughts in the comments section below.

Join us tomorrow as we wrap up our week long series on the Credit CARD Act and prepare for the new laws that go into effect on Aug. 22 – just a few days away.


  • http://profile.typepad.com/susanblan Suzy

    The weirdest thing has been happening, regarding approval of credit card apps. I have more than a few credit cards, and just got my most recent Old Navy Visa, when we were on vacation, near store outlets. Before that I received a credit card to Lowe’s, Victoria Secret, Kohl’s, Target, and the best one of all the “diamond” card, which I know for a fact, requires excellent credit. Anyway, I went to apply for a credit card and I was declined! About 5 minutes later, I applied for another card, and again was declined. I know that even applying for credit cards affect credit scores, and not for the good! I’m just wondering why I even got declined? I have been getting a lot of various credit cards, so I thought I had great credit! Oh, and many of them have very low balances, if not $0 balance.

  • http://www.Credit.com Gerri

    If you are declined based on your credit score, the issuer is required by law to give you the top four reasons that contributed to the decline. Did you get a disclosure? Watch your mail for one. The letter will also tell you how you can request a free copy of the credit report that was used for the decision.
    You may also want to try Credit.com’s (truly) free Credit Report Card to see if there is something going on with your scores that you are not aware of. Just go to the home page at Credit.com and you’ll see it right there. It’s a soft inquiry so it won’t affect your credit.
    Let us know what you find out!

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