The Credit Card Act In Effect This Month.

Online, February 28, 2010 (Newswire.com) - The general idea about the Credit Card Accountability, Responsibility and Disclosure Act 2009 is that it will change a lot for the card holders but will put more pressure on the credit companies.

The staggering figure of $ 15 billion a year only in card penalty fees for Americans is appalling. The consumers need a leg up so the whole country could get back on track.

The focus of this act is to abolish interest hiking practices and small prints in legal copies. Let's face it, none of us have fully understood the credit card contract, ever. The small prints are important but the consumer behavior is obvious. Therefore in the act it also includes that the contract be written in plain English and be available online.

Some changes that would occur with the application of the act would be:

- 'Anytime, any reason and universal hikes' on interest rates be banned.
- Restriction of rate increases during late payments
- Restriction of under - 21s when applying for a credit card
- Scrutinizing promotion of credit cards by universities.
- Pay date to be set at least after 21 days of mailing date.
- Restriction of unscheduled deadlines such as no weekends, changing due dates, and deadlines that fall in the middle of the day.
- Contract terms be written in layman English and available online.

The White House has an estimation of nearly 80 percent of Americans holding a credit card of which nearly 44 percent have a balance on it. Adding young and mostly incapable of personal financial management college students would just be blowing wind to the fire. There have been quite irresponsible activities by the credit companies as well as the young card holders and this step seems like the perfect solution.

The interest hikes, as said before, have also been catered to in this law. The companies will be prohibited to raise rates on current balance unless the creditor pays at least 60 days late. Also if the creditor pays on time for the following six months, the rates would be restored.

It is said that this law force companies to either charge higher rates on everyone and annual fees or withhold credit.