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The Credit Card Holders Bill of Rights Act of 2008

Posted By Allmand Law Firm, PLLC || 23-Sep-2008

The average American family now carries over $8,000 in credit card debt. That figure is likely to increase given the present state of the economy. In many cases, it has been the unfair practices of the credit card companies that have contributed to the debt of the average American family. For several years now, credit card companies have hit consumers with unfair fees, unwarranted hikes in interest rates, and other unfair practices.

What is the Bill of Rights Act of 2008?

The Credit Card Holders Bill of Rights Act of 2008 seeks to change those unfair practices and provide families with additional protection. In other words, the Act works to provide a balanced approach to reforming major industry abuses and improving consumer protections for cardholders. It will put an end to many of the tricks and traps that make cardholders incur interest rate hikes and pricey fees, including arbitrary interest rate hikes, hidden fees, due date gimmicks, and misleading account terms.

The Act seeks to amend the Truth in Lending Act. It prohibits creditors from using certain information, including information in a consumer report or any change in a consumer's credit score, as the basis for increasing any annual percentage rate (APR) of interest on the consumer's outstanding balance under an open end consumer credit plan, except for actions or omissions of the consumer directly related to such account. Under this Act, a creditor cannot change any term of the contract or agreement of an open end consumer credit plan until contract renewal, except for specific material reasons already contained in the contract or agreement.

The credit card company must give advance notice of credit card account rate increases. A consumer who receives such as notice can cancel the credit card without penalty or the imposition of any fee. Additionally, they may pay any outstanding balance that accrued before the effective date of the increase at the APR and in the repayment period in effect before notice was received.

Creditors cannot impose interest on credit repaid within the interest-free repayment time period and fees on any outstanding balance on a credit card account attributable only to accrued interest on previously repaid credit.

The Act mandates that each periodic statement of account should provide specified information on obtaining the payoff balance. Creditors cannot furnish information to a consumer reporting agency concerning a newly opened credit card account until the consumer has used or activated the credit card. A consumer can now opt-out of creditor authorization of over-the-limit transactions if fees are imposed. The Act also restricts the frequency of over-the-limit fees.

It encourages fair competition and sets no price controls, rate caps, or fees. It gives American credit card holders a fair deal. If you believe that your rights have been violated and you have unfairly suffered from unfair practices, contact Allmand Law Firm, PLLC today!

Categories: Credit and Bankruptcy
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