Credit Card Bill of Rights to Take Effect in February 2010

The Credit Card Bill of Rights, officially called the  Credit Card Accountability, Responsibility, and Disclosure Act (CARD), comes into effect in February 2010, but the first element takes effect thsi week. As of Thursday, August 20, credit card issuers must give customers 45 days' notice before raising interest rates, instead of the current 15 days.

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Abandoned Visa Logo

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Here are some of the key elements to the Credit Card Bill of Rights:

• Freeze on interest rates on canceled cards
• Allow consumer to prevent over-the-limit charges that will result in extra fees
• Card issuers are banned from marketing to students
  
• Prohibits unilateral changes to card agreements before that card's expiration date
• Restricts dormancy and service fees for unused cards

The upshot is that consumers will be better protected against sudden and shifty card-issuer practices, but they'll also have to more carefully manage their own usage. Also, fee structures can change: variable-rate cards aren't banned, but issuers just have to give advance notice when variable rates come into play. Also watch for the return of the annual fee.

ALso, consumers will have to specifically ask to be allowed to go over their pre-agreed credit limit, rather than find themselves able to complete an over-limit transaction and be met with an extra fee later.

One never had the "right" to go over one's credit limit. It's a credit limit. Credit cards, by their very definition, are tools for managed debt.  This is, you're spending money that you don't have on you in the hopes of paying it back within thridy days. That so many consumers do not understand this-- that they don't take responsibility for tracking what they spend and how debt affects them-- is part of why we're in this credit mess to begin with. When you aren't in control, don't act surprised when the credit card issuers take that control.