Thanks, President Obama: Credit-card holders get a better deal

Don’t believe ‘em when they say the progressive agenda is unloved by American citizens. Much has been accomplished in the first two years of the Obama administration, and ordinary people are benefiting. Of course, some progressives feel disappointed that the administration hasn’t pushed hard enough, that its policies are too centrist, and/or that it has failed to communicate its accomplishments. And there’s justification for some of that disappointment.  But, just to be sure that we don’t forget who’s behind the policies that address the common good, here’s first in a series of reminders about what has been done, and how it helps.

In  August 2010, the final provisions of the Credit Card Accountability, Responsibility and Disclosure Act [CARD] of 2009 took effect.  Designed to hold credit-card companies accountable and to eliminate deceptive practices, the CARD act addresses the interests of the “nearly 80 percent of American families who have a credit card, and the 44 percent of families who carry a balance on their credit cards.” Here are some of the provisions of the 2009 CARD Act, as listed by International Business Times.

  • Requires creditors to give consumers clear disclosures of account terms before consumers open an account, and clear statements of the activity on consumers’ accounts afterwards;
  • Requires issuers to make contracts available on the Internet in a usable format;
  • Bans retroactive rate increases;
  • Requires contract terms be stable for the entirety of the first year;
  • Requires institutions give card holders a reasonable time to pay the monthly bill – at least 21 calendar days from time of mailing – and it ends late fee traps such as weekend deadlines, due dates that change each month, and deadlines that fall in the middle of the day;
  • Requires companies to apply excess payments to the highest interest balance first;
  • Ends the confusing and unfair practice by which issuers use the balance in a previous month to calculate interest charges on the current month, so called “double-cycle” billing;
  • Restricts fees on subprime, low-limit credit cards;
  • Requires institutions to obtain a consumer’s permission to process transactions that would place the account over the limit;
  • Requires issuers to display on periodic statements how long it would take to pay off the existing balance – and the total interest cost – if the consumer paid only the minimum due; and also to display the payment amount and total interest cost to pay off the existing balance in 36 months;
  • Requires regulators to report annually to Congress on their enforcement of credit card protections;
  • Holds regulators accountable to keep protections current;
  • Increases penalties for card issuers that violate these new restrictions;
  • Increases protections for college students and young adults.

The last pieces of the act took effect over the summer. They require credit-card companies to honor gift-cards for five years, and prohibit them from reducing the amount of gift cards that are not used quickly. Also, credit card issuers will no longer be allowed to charge a late fee larger than your minimum payment, or charge you more than one penalty fee for a single violation of your agreement, or charge a fee for not using or terminating your account. Credit card companies, since 2009, have been required to  give 45 days notice of a rate hike. Now, the company must also say why it’s raising rates, and it must re-evaluate the hike every six months.

Certainly, it’s not a perfect law. But there’s a lot to love there. So–pun intended–let’s give credit for this where it’s due.