The Credit Card Accountability Responsibility and Disclosure (CARD) Act went into effect on February 2, 2010. It’s supposed to help protect consumers from credit card companies, but even before it was in place the banks were already loopholes devising loopholes.
Some things will change for the better. Due dates for monthly payments must be the same every month. Any payment you make over the minimum amount has to be applied to the highest-rate debt on the card (like, say, your cash advances). And it’s harder for credit card companies to increase your interest rate, at least on existing balances.
So what are the credit card companies doing to make sure they still make incredible profits? Many will start imposing annual and balance transfer fees. They’ll add “inactivity” fee for people who don’t use their card enough or at all. Pay off your card every month and you might just be dinged again.
Worst of all, the new law doesn’t cap interest rates. At least one credit card company will be issuing a card with an effective interest rate of 79.9%!
Make sure you review any changes to your credit card contracts post 2/2/10 and carefully shop around when considering new offers for credit.