The Credit CARD Act of 2009 has made prices clearer, without constricting the availability of credit, “Credit Card Clarity: CARD Act Reform Works." The new law says issuers:
- Can no longer increase interest rates on existing balances, except when an account’s 60 days past due or if already carries a variable rate and the index that rate is pegged to changes.
- Must verify that a borrower has the ability to repay the credit.
- Can no longer allocate a consumer’s payment above the minimum in a manner that maximizes interest rates.
- Must give 21 days between the date a bill’s mailed and the due date.
- Must abide by limits on how large a penalty fee can be.
- Can charge fees no more than 25 percent of a subprime credit card’s line of credit.
- May not engage in high-pressure marketing on college campuses.
The Consumer Financial Protection Bureau must monitor credit card industry practices to ensure issuers follow the law and to police for unfair, deceptive practices. And Congress should extend to business credit cards the reforms individuals enjoy on consumer cards.