The Gothic Times

Issue date: 12/15/09 Section: News

Media Credit: abcnews.com

The New Jersey City University (NJCU) community is satisfied with the newly proposed credit card legislation known as the Credit Card Accountability Responsibility and Disclosure Act of 2009, which was introduced in the House of Representatives as H.R. 627 and provides consumers with greater protection against excessive fees and interest rates.

The legislation, passed in the Senate on May 19, 2009 by a 90-5 margin, will fully take effect in February 22, 2010.

"I think that it [the legislation] may make them [the credit card issuers] more cautious at giving out credit cards and giving out limits," said Dr. Harris Hordon, Chairperson of the Economics Department.

"I very much supported the government effort to curb the abusive actions of credit card companies. The Congress is very much in favor of the public."

According to creditcardreform.org, a few provisions related to the legislation took effect in August 2009, for instance, increasing notice for rate inflation on future purchases, preserving the ability to pay off on the old terms, and providing sensible due dates and payment timetables.

"The government is finally pursuing a reform for the betterment of the people. It is a great opportunity for those consumers who are having trouble with late payments, high APR rates, and debts," said Jan-Francis Aniban, 22, a Finance major from Jersey City. "There are many people in the United States who have credit and debit cards, and through this legislation, they will feel a little relieved from the notorious practices of the credit card companies."

Here is an overall summary of the legislation:

- Restricts all interest rate during the first year-Credit Card issuers cannot increase interest rate in the first year when the credit card account is opened unless the increase is under the variable interest rate, at the end of the promised time periods of the promotional rate, and if the required minimum payment is not received within 60 days after the due date.

- Restricts interest rate increases on existing balances-Credit card issuers cannot raise interest rate on existing balances unless the increase is under a variable interest rate, the promised time periods for a promotional rate is coming to an end, the required minimum payments is not received within 60 days after the due date.

- Increases notice for rate increase on future purchases-The card issuer can raise interest rate on future purchases with 45 days notice after the first year.

Continued...

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