Credit Card Act of 2009

Aug 25, 09 Credit Card Act of 2009
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Last year, Congress passed a significant piece of legislation.  The Credit Card Accountability, Responsibility, and Disclosure Act of 2009 is the first bill in many years that provides substantive new protections for consumers.  Gouged for years by a greedy and unscrupulous credit industry, Americans have watched their debt to savings ration increase exponentially.

Partially due to institutionally encouraged mass ignorance, and partially due to a uniquely American sense of immediate gratification, the credit industry has been happy to fund our debt and make billions from our self-indulgence.  However, with the recession in full bloom, the bill finally went into effect on August 20, 2009.

While the new law provides many new protections for consumers, credit lenders had already been increasing fees in anticipation of its passing.  Many argue that the provisions still leave consumers exposed to shady, disreputable credit lending practices.

Some provisions of the bill provide major new consumer protections.  For instance, credit lenders must give consumers a 45-day advance notice before they raise interest rates and statements must be mailed out 21 days before payment is due.

In addition, lenders must allow borrowers to opt out of rate increases and pay off their balance at the previous rate.  While these are seemingly good ideas, the multibillion-dollar industry will not give up their profits so easily.

Before the law went into effect, the credit lenders raised fees, increased interest rates, and switched fixed interest rates into variable rates.  This was done with the sole purposes of circumventing Congresses modest new requirements for lenders.  With variable rates hovering around 11%, and new fees on the outstanding principle, consumers are feeling the pinch.

However, for those who are aware of how to navigate the murky waters of the American credit industry, this law will aid them in getting out of, or staying out of, debt.  While it does not provide comprehensive protection, the Credit Card Accountability Responsibility and Disclosure Act of 2009 does correct partially correct the historically, corporate tilted imbalance.

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