With the CARD act coming into play, credit card lenders do not have the liberty of increasing the annual percentage rate on the credit cards arbitrarily. They have to mandatorily give customers a 45 day notice to intimate them about the forthcoming changes so they can either be prepared for it or close the card if they are not willing to accept it.
Another stipulation of the act says that the lenders cannot increase the rates without any rhyme or reason. They can increase the interest rates only if the customers have not been making their payments on time or have defaulted many times in the past. Even when the banks do increase the rates in such cases, it has to be only on the fresh expenditure made using the card and not on the existing balance. It is also imperative for credit card issuers to review customers accounts once every six months and reduce the rate of interest if they have been paying their dues consistently on time. Also, if you have multiple cards with the same lender, banks cannot increase the rate of interest on both cards if you have defaulted only on one. Another important stipulation of the CARD Act is that customers cannot be charged an over-the-limit fee if they have not opted for the overdraft facility.
Despite all these changes brought about by the CARD Act, there are a few loopholes that the banks are still exploiting to their benefit because of which this act seems ineffective. This act does not prohibit the lenders from closing the credit card accounts or reducing the credit limit without informing the customer in advance. Also, this act only offers protection for consumer cards and not for small business credit cards.
Read Also Related News
Discover cardholders will be able to contact customer service more easily with the advent of in-app messaging, which allows customers to communicate with Discover customer service agents without having to stop and restart their...
Citi’s mobile app has been updated to allow cardmembers to scan their credit cards, allowing them to skip the burdensome step of entering all 16 digits manually when they want to buy something with their Citi card. Customers will be...
Walmart customers who want to pay for their purchases via smartphone will soon be able to do so, after the retail giant announced that they would begin accepting Chase Pay in 2017. Chase Pay will be accepted on Walmart.com and through...
To set a PIN on your credit card, you should call the credit card issuer at the number on the back of your credit card and request your PIN. After that, the issuer will mail to you your PIN. In the meantime, if you need cash, you can go to a bank office and present your credit card and picture ID.
Avoiding your credit card bill will do a lot of damage on your credit and you will need a good deal of time and effort to undo it. When you miss a payment, you get slapped with late fees. If you do not make a payment for an entire billing cycle, you’ll be considered 30 days past due and this will be reported to the...
The overall process of getting a credit card can take up to 30 business days. To know the status of your credit card applications you should contact the credit card issuer. A quick online search for the bank or credit card issuer's name should turn up a customer service phone number or email address. Banks and credit card...
If your security code is rubbed out, contact your credit card issuer and explain them your situation. Most likely you will be offered a replacement card. Your credit card issuer will not provide you with the security code over the phone or via email. That's for your own protection.