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Highlights of the New Credit Card Rules: What They Do and Don’t Do

A few provisions of the Credit Card Accountability, Responsibility, and Disclosure Act that President Obama signed into law May 2009 took effect immediately, and a few didn't take effect until August of that year. But most of the provisions took effect February 22, 2010. While these new rules are a significant improvement from the status quo that pervaded credit card policies for years, they are not enough. In the months leading up to the changes that took effect February 22, 2010, credit card issuers adopted tricks and traps intended to evade the law. The Federal Reserve Board, which wrote...

Credit Card Clarity: CARD Act Reform Works

Read the full, original report or executive summary from February 2011. Watch our 4.5 minute video of Senior Researcher Josh Frank discussing the findings. Updated CARD Act Research (June 2011): Clearer Pricing Not Raising Rates CRL's research shows that the Credit CARD Act of 2009 has reversed much of the unclear pricing on credit cards, without leading to higher rates or more difficulty in getting credit. These findings refute claims made by opponents of the credit card reforms. "People mistake higher rates on mail solicitations and other offers in the last year as a price hike," said CRL...

Numbers Game: The True Cost of Credit Card Mail Offers

Credit card offers have grown increasingly complicated since 2000, when Congress required issuers to start disclosing pricing information on credit card offers. But instead of providing clarity to consumers about the true cost of their credit cards, issuers responded to this mandate by adding a confusing array of numbers to their offers, new CRL research finds. Specifically, CRL's research finds that numbers in credit card direct-mail offers increased 250% from 1999 to 2009, and at the peak in early 2009 the average credit card summary contained 33 figures. Much of the increased complexity in...

Analysis of Federal Reserve Research on Behavioral Scoring

Read the full comment to the Federal Reserve CRL Comments On "Report to the Congress on Reductions of Consumer Credit Limits Based on Certain Information as to Experience or Transactions of the Consumer"[1] The Federal Reserve recently issued a report based on a survey of credit card issuers that asked whether they had taken adverse action on consumers' accounts based on cardholder patronage of merchants by geographic location, merchant type or transaction type. This practice is commonly known as "behavioral scoring." The media have highlighted examples of card issuers judging consumers to be...

A Just Fee or Just a Fee?

An Examination of Credit Card Late Fees Read the entire "A Just Fee or Just a Fee?" 13 page research report. Brief background on the report plus report findings: The CARD Act of 2009 brought strong credit card reform to the industry and benefits to cardholders, but the penalty late fee issue remains to be addressed. Congress assigned the Federal Reserve to interpret what "reasonable and proportional" penalty fees means according to the borrower's violation, a credit card late payment, for example. This timely CRL report informs the discussion of credit card issuers and penalty late fees...

Capitalizing on New Credit Card Consumer Protections

Four Tips to Rid Yourself of Credit Card Debt Sooner and Save Money The CARD Act of 2009 has provisions that enable borrowers to pay down their existing credit card debt sooner, save money in future interest, and improve their credit score. These key protections took effect on February 22, 2010, and have forced credit card issuers to reform the complex way card payments are credited to individual accounts. CRL advises Americans to: Pay above the minimum amount due. Paying more than the minimum can save you as much as $2 for every extra $1 you pay. For example, before the CARD Act, paying $100...
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