The Credit CARD Act of 2009, which establishes new protections for cardholders, was signed into law back in May, but gave credit card companies a full nine months to prepare. Now, the Congress wants to move up the law's effective date from February 22, 2010 to December 1.
What's prompting the scheduling change? According to CNNMoney.com, credit card companies haven't been using the downtime to prepare for their new practices‒they've been using it to squeeze as much money out of cardholders as possible, raising APRs, lowering credit limits, and changing account terms.
Each of these tactics will require extra notice, while others will be banned under the Credit CARD Act.
Representative Barney Frank, who co-introduced the legislation to speed up the protection, recently explained the situation to the Associated Press, “It is very clear that this is the kind of protection that shouldn't wait and we should move forward."
Combining higher interest rates and lower credit lines is moving the credit crunch from the banks to the consumers, leaving more Americans defaulting on their cards and filing for bankruptcy as a result.
Tags: barney frank, congress, credit CARD act, credit cards
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