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CARD Act protects those struggling with credit card debt

Many Tennesseans struggle with paying their monthly credit card payments. To make matters worse, some credit card companies take advantage of this situation and raise annual percentage rates and fees, driving consumers further into credit card debt. In 2009, the Credit Card Accountability, Responsibility and Disclosure Act came into effect to protect consumers who are in this situation.

The CARD Act protects against sudden APR increases without the consumer's knowledge. For the most part, creditors cannot increase an APR within the first year of a new account unless it was increased due to an index that the card issuer could not control; the creditor disclosed at the time the card was issued that the APR could be increased sometime in the first 12 months; the consumer has gone 60 days without making a minimum payment; or the consumer fails to abide by a payment agreement with the credit card company.

The CARD Act also requires 45 days notice of increased interest rates and fees. If the consumer does not agree with these changes, he or she has the right to cancel and cannot be forced to pay off the balance upon cancellation.

Various consumer disclosures are also required. Due dates, fees, penalty APRs, year-to-date interest and the estimated time it would take to pay off the balance should be displayed on every credit card statement. There are also changes to how payments are applied and when to consider a payment late.

Consumers in debt have rights. Those concerned about the actions of their creditors may want to consult with an attorney who can determine whether or not any laws are being broken.

Source: FindLaw, "Credit Card Rules and the CARD Act," accessed March 29, 2015

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