It can be difficult to navigate the political rhetoric surrounding new bills, especially those related to the financial sector. President Obama’s credit card reform directly changes legislation to make the credit card market a safer place for consumers to tread by instituting several key changes.
First, the new law bans retroactive rate increases, and provides first year protection for consumers. This means that a creditor is no longer able to change the percent interest rate for no reason, and must abide by the stated introductory contract for a year.
Next, the law removes unfair fee traps and requires plain language in plain sight on all statements and documents related to your account. Now not only is it illegal for your bill to be due on a weekend or holiday, but creditors cannot make alterations to your contract without telling you directly.
Finally, the law requires more accountability for the actions of creditors, and protects students and young adults from credit traps, such as offering a free pizza for signing up for a card. All schools allowing creditors to advertise on campus must release documents detailing their contracts, disclosing to the public the profit they’re making from the deal.
Take a look at our slideshare below to learn more specific details about the act, and then take a look at our blog to learn how you can take the first steps onto the path toward good credit and financial freedom.