Senator wants to move up CARD Act implementation - Bills.com News

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Senator wants to move up CARD Act implementation

Thursday, Oct 29, 2009
By Lucy Sanderson

Democratic Senator Mark Udall of Colorado is pushing his fellow congressmen to implement the Credit Card Accountability Responsibility and Disclosure Act by December -- rather than February, as the act currently stipulates -- in a bid to help consumers currently dealing with credit card debt.

The act will obligate credit card issuers to give cardholders 21 days' notice before their bill is due. It also makes arbitrary rate hikes illegal.

But many consumers are seeing newfees and rate increases on their cards now, months before the act is set to be implemented, says CNN. Card companies are trying to mine whatever profits they can before being hit with new regulation.

Card issuers are also trying to mitigate the risk that is created when they extend credit to consumers. With higher minimum monthly payment requirements, for example, they attempt to rein in consumers' spendthrift habits.

Decreasing cardholders' credit limits is another popular tactic among issuers. But a lower credit limit can equate to a lower credit score, since a portion of the credit score is
comprised of a consumer's "debt-to-credit" ratio.

Cardholders have little recourse until the act takes effect -- but if an issuer raises rates unexpectedly, consumers do have the option of paying off their credit card debt and canceling the card.

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