What the CARD Act of 2009 Means for Consumers

Includes: AXP, DFS, MA, V
by: The Sun

The U.S. Senate overwhelmingly passed the Credit Card Accountability, Responsibility, and Disclosure (CARD) Act of 2009 earlier this week. The House, which already passed its own version of the bill last month, also voted 361 to 64 to wrap up the legislation. Now the bill is sent to the President for his signature to become a law, which could happen before the Memorial Day weekend.

The CARD Act aims to protect consumers by preventing card issuers from hiking interest rates whenever they feel like to, charging fees that don’t make any sense, and allowing cardholders enough time to pay their bills every month. This video from New York Times explains quite well what the new credit bill means to consumers.

If you ask me whether I think this bill is a good idea or not, then my answer is yes, it is.

However, I don’t see I can benefit much from this legislation personally because I have been following the simple rule in using credit cards since the first day I got my first card: Pay my bill in full on time every month. With this rule, I have never got into trouble with credit cards and enjoy a very good credit score. Credit card interest rate, which is the center piece of the new legislation, is never an issue to me, whether it’s 5% or 50%, because I haven’t paid a penny in credit card interests.

When using credit cards, what really bothers is credit card rewards program being downgraded, which unfortunately could be one of the consequences of the new CARD Act. Since now credit card issuers can no longer charge those fees (over the limit fee, pay bill over the phone fee, etc) they used to charge, they will have to find other legal ways to make up the shortfall in revenue, including adding annual fees to cards and canceling card rewards programs.

If this indeed turns out to be the case, then I am afraid I don’t get any protection from the new rules. Instead, I become a victim of it .