Addendum

Credit Card Accountability, Responsibility and Disclosure Act of 2009 — (“Credit Card Act”)

The Credit CARD Act represents a fundamental change for the credit card industry, marking the beginning of a new era of consumer empowerment. Signed into law in May 2009, the Credit CARD Act provides consumers with protections from unfair practices such as unexpected interest rate increases and ensures better disclosure of credit card terms and fees. Understanding these disclosures can make it easier for you to manage your credit wisely — helping you to meet your payment deadlines, avoid late fees, and know in advance if your interest rate will be increasing giving you plenty of time to plan ahead and make an extra effort to use cash and/or opt-out of certain terms.

What the Credit CARD Act Means for Consumers:

  • Your interest rate will be honored for one year after you open an account. However your rate can be increased:
    • if your card has a variable interest rate (if the index goes up, so can your rate)
    • if you are more than 60 days late in paying your bill
    • if you are in a workout agreement and you don't make your payments as agreed
  • Introductory rates will be honored for at least six months, after that your rate can revert to the "go-to" rate (the rate must be clearly disclosed when you first get the card).
  • Banks will not charge you a fee if you exceed your credit limit…unless you agree in advance to “opt-in” and pay the fee in return for the flexibility to exceed that limit.
  • Banks will provide at least 45 days notice before increasing your interest rate, changing certain fees or making any other significant changes to the terms on fixed-rate cards.
  • Banks will honor your interest rate on an existing balance, unless your minimum payment is at least 60 days overdue. If this occurs — and you pay on time for six months in a row — your previous rate will be restored.
  • Banks will no longer charge interest on balances you paid on time the previous month. (No double-cycle billing).
  • Banks will no longer raise your interest rate just because you missed a payment deadline with another lender. (No universal default).
  • Bills will be sent at least 21 days before the due date.