Are you ready for the Credit Card Act of 2009?


With the enactment of The Credit Card Accountability, Responsibility and Disclosure Act of 2009, commonly referred to as The Credit Card Act of 2009, several changes have occurred that will dramatically impact how Americans utilize their credit cards, debit cards, and gift cards. Are you aware of your rights and protections under the new law?

Your credit, debit, and gift cards have become more consumer-friendly. The Credit Card Act of 2009 authorized the Federal Reserve to establish new rules regulating the credit card industry. Several provisions took effect on Feb. 22, including 45 days required notice for interest rate hikes, restrictions on obtaining a credit card for those under age 21, and the elimination of double cycle billing.

Effective 12:01 a.m. today, the final batch of regulations became effective. For the most part, these new rules protect consumers from unreasonable penalty fees and excessive interest rates. These rules are particularly important if you are struggling with high credit card debt.

Interest rates

For those consumers who carry a balance on their credit cards from month to month, having low interest cards can save a lot of money. Unfortunately, many companies have gone in the opposite direction, substantially raising rates for millions of consumers on their credit cards. The new rules will help in several aspects.

• If a company increases the annual percentage rate on your credit card, they must explain why. While this rule will not prevent a rate increase, a reason must be provided for said increase (such as a lower credit score), and consumers will have an opportunity to address the issue.

• If a company increases your credit card interest rate, they must re-evaluate that increase every six months. If the reason for said increase has been resolved, they must reduce your interest rate to the former level within 45 days of completing a reevaluation. This rule is particularly important to consumers who have seen their interest rates skyrocket due to lower credit scores.

Penalty fees

Credit card companies have become known for excessive fees and charges. From late payment fees to over-the-limit charges, credit card fees have become a consumer nuisance. While the new regulations will not eliminate these fees, they should reduce them.

Credit card companies can no longer charge a penalty fee in excess of $25 in most instances. There are some limited exceptions to this rule. For example, if the company can substantiate costs in excess of $25 as a result of said late payment, the penalty may exceed $25. Moreover, if you were delinquent in the last six months and pay late again, the penalty may be increased to $35.

• Consumers cannot be charged a late payment penalty in excess of your minimum payment. This avoids the practice of companies adding a $39 late payment penalty because you were a few days late on a $10 minimum payment.

• Credit card companies can no longer charge a fee for dormant accounts. Called an inactivity fee, some companies assess a fee if you did not use the card enough. The new rules eliminate this practice.

• Credit card issuers cannot charge more than one penalty fee for each transaction or event that gives rise to said fee. For example, if you were late with a payment and the penalty fee caused your account to exceed its credit limit, companies cannot assess an over-the-limit charge in addition to the late penalty fee. The new regulations put an end to this double-penalty practice.

Only time will tell how well these regulations work at protecting consumers. In some cases, new regulations cause companies to find alternate ways to raise revenue, such as increasing annual fees or reducing other benefits. For now, though, consumers may get some relief from excessive credit card fees and rising interest rates.

To learn more about The Credit Card Accountability, Responsibility and Disclosure Act of 2009 and your rights and protections under the new law, visit http://www.tinyurl.com/thecreditreport.

William E. Lewis Jr., is a credit repair expert and host of “The Credit Report with Bill Lewis” on AM 1470 WWNN, a daily forum for business and financial news, politics, economic trends, and cutting edge issues.

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Guide to Credit Reports, Credit Scores


Attention is focused on new financial regulations enacted as part of the Dodd-Frank Act.

Earlier this year, the Federal Trade Commission announced final rules requiring creditors to provide consumers’ with a “risk-based pricing notice” when granting credit on less favorable terms than it provides other consumers.

To assist consumer understanding of these new rules, the U.S. Federal Reserve has unveiled an online guide to credit reports.

This straight-forward guide includes information on credit reports and credit scores, how they are utilized in credit granting decisions, unsolicited credit offers, credit repair and how to protect your personal information from fraud.

Released on Wednesday, the “Consumer’s Guide to Credit Reports and Credit Scores” is meant to complement consumer-protection laws that Congress enacted several years ago.

Under the Fair and Accurate Credit Transactions Act of 2003, lenders – starting in January – will be required to tell consumers when adverse information on their credit reports is going to result in higher rates and fees for mortgages, credit cards and other loans.

In today’s tough economy, a strong FICO (Fair Isaac) credit score is more important than ever. Studies show that approximately 78 percent of credit profiles in the United States contain some sort of error or omission materially impacting credit worthiness.

As creditors tend to offer favorable terms to consumers with good credit histories and more costly credit to those with poor credit histories, the guide is intended to assist them in disputing negative and/or inaccurate information prior to making an application for credit or employment.

Under the “risk-based pricing” rules, consumers hit with the less favorable credit terms can also obtain a free credit report to check its accuracy.

Under the Fair Credit Reporting Act, as modified by the Fair and Accurate Credit Transactions Act, consumers are entitled to a free copy of their credit report under a narrow set of circumstances.

If you have been denied credit, goods, benefits, services, insurance, and/or employment, the credit reporting agencies of Equifax, Experian and Trans Union are statutorily mandated to provide a copy free of charge.

Absent these exceptions, consumers are entitled to one free “annual credit report” per year. Credit scores are not included with any of the “free credit reports” provided by the national credit reporting agencies.

Equifax can be contacted at (800) 685-1111 or www.Equifax.com; Experian can be contacted at (888) 397-3742 or www.Experian.com; and Trans Union can be contacted at (800) 916-8800 or www.TransUnion.com.

Be sure to prompt that you were denied credit when requested to do so.

For your free annual credit report, contact the central source at 877-FACT-ACT (877-322-8228) or www.AnnualCreditReport.com. Follow the voice prompts and obtain your credit report for review.

Consumer advocates say additional work is needed to address concerns about credit reports and credit scores. “The main problem is really with credit reports – they’re just plagued with inaccuracies,” said National Consumer Law Center attorney Lauren Saunders. “It’s a nightmare for consumers to get anything fixed.”

Saunders said she is expecting the FTC and the new Consumer Financial Protection Bureau, the first agency to be charged with protecting consumers from abusive financial products, to take more action in addressing consumer concerns about credit reports.

Acting as a primer to the uneducated individual, the “Consumer’s Guide to Credit Reports and Credit Scores” advises what they should do if they find errors. In a three-step process, ordering credit reports and reviewing them for errors or inaccuracies; contacting the credit reporting agencies to enter a formal dispute; and, waiting for a response from the CRA’s and/or creditors is explained.

To learn more about the Consumer’s Guide to Credit Reports and Credit Scores, visit www.federalreserve.gov/creditreports. To review Bill Lewis’ entire consumer protection series at the Highlands Today, visit www.williamlewis.us.

Source:  The Credit Report with Bill Lewis – Highlands Today, an edition of the Tampa Tribune – Media General Group.  http://www2.highlandstoday.com/content/2010/nov/14/guide-credit-reports-credit-scores/

William E. Lewis Jr., is a credit repair expert with Credit Restoration Consultants and host of “The Credit Report with Bill Lewis” on AM 1470 WWNN, a daily forum for business and financial news, politics, economic trends, and cutting edge issues.

A Truly Free Credit Report Without Cost or Fee


Have you ever been denied credit, goods, benefits, services, employment and/or insurance? Do you have a problem with “free” credit reports that are often bundled with credit scores and/or credit monitoring services and steep monthly fees? If so, you are not alone.

As part of the Credit Card Accountability, Responsibility and Disclosure Act of 2009 (commonly referred to as the Credit Card Act of 2009), advertisements for credit reports will soon require enhanced disclosures to help consumers avoid confusing “free” offers. These offers often require consumers to spend money on credit scores and/or credit monitoring while the “no-strings-attached” credit reports available through the central source at www.AnnualCreditReport.com are truly free to consumers once every 12 months

Effective April 1, 2010, the Federal Trade Commission’s Free Credit Reports Rule will require a prominent and enhanced disclosure in advertisements for “free” credit reports. Specifically, all Web sites offering “free” credit reports must include – across the top of any page that mentions them – a disclosure stating:

THIS NOTICE IS REQUIRED BY LAW. Read more at FTC.GOV You have the right to a free credit report from AnnualCreditReport.com or 877-322-8228, the only authorized source under federal law.

The Web site disclosure must include a clickable button to “Take me to the authorized source” at www.AnnualCreditReport.com as well as clickable links to the Federal Trade Commission Web site at www.ftc.gov.

Under recent legislation, the Credit Card Act of 2009 required the Federal Trade Commission to issue a rule to prevent deceptive marketing of “free” credit reports. Specifically, the Act requires that certain advertisements for “free” credit reports include prominent disclosures designed to prevent consumers from confusing these so-called “free” offers with the federally mandated “free” annual credit reports available through the “centralized source,” which is www.AnnualCreditReport.com.

The Federal Trade Commission proposed amending the rule in late 2009 and received more than a thousand comments from consumers, consumer reporting agencies, consumer report resellers, business and trade organizations, state attorneys general, consumer advocates, law firms, members of Congress, and academics. Most of these comments were in favor of change and enhanced disclosure requirements.

The amended rule also restricts practices that might mislead or confuse consumers as they attempt to obtain their federally mandated “free” annual credit report. The consumer reporting agencies of Equifax, Experian and TransUnion will now be required to delay the advertising of any products and/or services at the central source until the consumer has successfully obtained their “free” annual credit report.

Except for the wording of the disclosures for television and radio advertisements, which takes effect on Sept. 1, 2010, the new rule is effective April 1, 2010. The Federal Trade Commission will monitor and evaluate the effectiveness of the amended rule as well as the required disclosures and may consider additional changes as deemed necessary in the normal course of affairs.

Information contained in credit reports may determine whether a consumer can obtain credit, goods, benefits, services, employment and/or insurance. As such, it is important that consumers review their credit reports and correct any information that is inaccurate, erroneous, obsolete, and/or fraudulent. Under the Fair and Accurate Credit Transactions Act, Equifax, Experian and Trans Union are required to provide consumers with a “free” annual credit report once every 12 months, but only upon request. To learn more about their right to a “free” credit report under federal law, consumers are encouraged to visit the Federal Trade Commission website at http://www.ftc.gov/freereports.

William E. Lewis Jr., is a credit repair expert with Credit Restoration Consultants and host of “The Credit Report with Bill Lewis” on AM 1470 WWNN, a daily forum for business and financial news, politics, economic trends, and cutting edge issues.

http://www2.highlandstoday.com/content/2010/feb/28/lc-a-truly-free-credit-report-without-cost-or-fee/columns-welewisjr/

Countdown to Credit Card Reform


In an ideal world, one would not worry about the recession, high unemployment rates, the foreclosure epidemic and the never ending debt load carried by the average American. In what has been referred to as the “Year of the Consumer,” 2010 has a lot to offer in federally mandated “changes” in the credit card industry.

With only eight days until enactment of The Credit Card Accountability, Responsibility and Disclosure Act of 2009, commonly known as The Credit Card Act of 2009, several changes are occurring that will have an impact on how Americans utilize their credit cards, debit cards, and gift cards. Are you aware of your rights and protections under the new law?

Consumer protection

Interest rate increases will be banned except when a cardholder is more than 60 days delinquent in paying a credit card bill.

The credit card issuer must review a cardholder’s account six months after increasing an interest rate and return the annual percentage rate to the prior lower level if all payments have been made on time.

An interest rate cannot be increased within the first 12 months of account existence and promotional rates must have a minimum of six months duration.

Advance notice of 45 days must be provided to a cardholder prior to changes in credit card terms and conditions. This includes any reward or benefit structure of a credit card.

The practice commonly known as universal default and double-cycle billing are no longer allowed.

Statements must be mailed at least 21 days before the payment due date.

Payments must be credited as on-time if received by 5 p.m. on the due date. All due dates that occur on a weekend or holiday are extended until the next business day.

Over-limit fees are now prohibited unless a cardholder specifically opts to allow processing of a transaction rather than being denied at a point of sale.

Enhanced consumer disclosures

A clear disclosure on how long it would take to pay off a credit card balance if cardholder makes only the minimum payment each month must be provided.

A clear disclosure on the total cost of interest and principal payments if a cardholder makes only the minimum payment each month must be provided.

Late payment deadline or postmark due dates are required to be clearly shown and provided to cardholders.

Protection of young consumers

Credit cards can no longer be issued to individuals under 21 unless they have an adult co-signer or prove payment ability through a reasonable income.

All college students must obtain permission from the adult co-signer to increase a credit limit on joint accounts they hold with those individuals.

Individuals under the age of 21 will now be protected from pre-screened credit card offers unless they specifically opt-in for said offers.

Gift cards

Gift cards are now required to remain active for at least five years from the day of their initial activation.

Dormancy or inactivity fees may no longer be imposed on gift cards unless there has been no activity in a 12-month period.

Dormancy or inactivity fees must be clearly disclosed to gift card buyers upon purchase.

Should a gift card expire after 5 years, the terms of expiration must be clearly disclosed to gift card buyers upon purchase.

To learn more about The Credit Card Act of 2009 and your rights and protections under the new law, visit www.tinyurl.com/thecreditreport

William E. Lewis Jr. is a credit repair expert with Credit Restoration Consultants and host of “The Credit Report with Bill Lewis” on AM 1470 WWNN, a daily forum for business and financial news, politics, economic trends, and cutting edge issues.

http://www2.highlandstoday.com/content/2010/feb/14/countdown-credit-card-reform/columns-welewisjr/