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Credit card issuers have been making major adjustments post the card act

2011-03-30

The credit card sector got a much-needed overhaul due to the congress and some of the worst practices that prevailed in the industry had to be done away with. Card issuers were made more accountable with regard to the information about their credit cards.

Now a year later, the new Consumer Financial Protection Bureau is reviewing the whole situation to see if the new set of rules has worked. It will bring together consumer advocates, insiders, and academics to review the whole situation and it is more likely to get a mixed response. While the consumer advocates seem to have given a favorable response, the experts from the card industry have claimed that it has led to a bump in the interest rates as well as less available credit for those in the high-risk category.

The CARD Act had been signed into a law in the year 2009, however, most of the reforms only kicked in during 2010. As part of the changes that were brought in card issuers have restrictions on raising the interest rates ad-hoc. The rates increases could only be carried on the new balances and not on the old ones. The customers will have to get a 45-day notice period from the card issuers before bringing in the new rates. This would help consumers to shop around for cards with better offers. Even the late fees were capped. Consumers seem to have no complaints with the latest amendments and are more than happy with these new rules that have come into play.