Feb 212010
Authors: Kirsten Silveira

Starting today, the Credit Cardholders’ Act of 2009, pushed by Democratic members of Congress, will go into effect to the advantage of students and other customers, officials said.

The legislation, supported by President Barack Obama, is aimed to level the playing field for people looking to sign up for credit cards and for those who have already signed an agreement.

“The new CARD Act will make it harder for card issuers to price their products according to the individual profiles of their customers,” said Ben Woosley, director of Consumer Research for CreditCards.com, a Web site dedicated to comparing card plans.

The act, he said, should also shield students from defaulting on payments and in turn “put less upward pressure on credit card rates” for all consumers.

Woosley outlined specific changes that will directly affect students:

  • Limited credit: People younger than 21 years old can’t sign for a credit card without a co-signer who agrees to take over payments if the cardholder cannot. Exceptions will be made if the minor can prove his or her ability to pay the bill.
  • Interest rate protection: Card companies are not permitted to raise interest rates without notifying the cardholder 45 days in advance. Also, if a payment is missed for more than 60 days, companies can raise rates but must lower them after six months of consecutive payments.
  • Card limit protection: A cardholder can choose to deactivate the credit card once the monthly limit has been reached. If the cardholder chooses to allow purchases that exceed the limit, the company can only charge a universal fee rather than a fee for every transaction.
    Limited upfront fees: Upfront fees cannot exceed 25 percent of the cardholders credit limit during the first year of a new account.
  • Fixed due dates for bills: Card companies can’t change due dates without notifying customers and payments will be accepted on time if received before 5 p.m.

Senior Reporter Kirsten Silveira can be reached at news@collegian.com.

 Posted by at 1:47 pm

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