Credit Card Issuers Are Making Changes in Agreements and Terms In Advance of CARD Act’s Full Implementation

NYS Consumer Protection Board Releases Preliminary Results of its Campaign for Change Credit Card Reform Survey as Provisions of New Law Take Effect

Of the consumers who responded to the CPB’s Survey:

• More than 90% of respondents stated that their card issuer changed the terms of their agreements.
• Nearly all respondents stated that the change involved an increase in their interest rate.
• Many have reported changes in fees, interest rates, rewards programs and reductions in the time available to pay bills.
• 62% said their card issuer had raised interest rates despite the fact that their balance had been completely paid off at the end of each billing period.
• 68% said they were charged interest from the time of purchase when their issuer had not charged in this manner before.

“The CPB is monitoring the actions of credit card companies through our Campaign for Change,” added Chairperson Bockstein. “These issuers have a perfect opportunity to demonstrate that they care about their customers during this interim period by establishing policies now that comport with the spirit of the soon-to-be fully implemented law. Some are already implementing the consumer protection strategies outlined in the law ahead of schedule.”

Effective tomorrow, credit card issuers must give 45 days’ advance notice to consumers of any changes in interest rates on future purchases or other significant changes after the first year of the card’s activation. The notice must also advise the consumer of the right to cancel the account. Additionally, credit card issuers will have to mail billing statements at least 21 days before the due date, and, if there is a grace period, the grace period must extend 21 days after the statement is mailed.

Ultimately, the CARD Act will:

• Reduce unannounced interest rate hikes;
• Limit arbitrary fees and charges;
• Require consumer opt-in to be assessed over-the-limit fees;
• Eliminate inappropriate double-cycle billing;
• Increase protections for minors (under 21) from aggressive marketing tactics; and,
• Require greater disclosure to be provided to consumers.

“I encourage consumers to participate in the CPB’s Campaign for Change by completing the Credit Card Reform Survey and/or e-mailing us their personal stories on credit card company performance,” added Bockstein. “We are empowering consumers who can assist us in protecting all of our interests.”

The CPB’s Credit Card Reform Survey asks consumers to inform the CPB if their bank or issuer has changed the terms of their agreements, added any new fees, increased fees or interest rates, reduced the time available to pay bills, charged interest from the time of purchase when that was not formerly their procedure, charged interest for previously paid balances, reduced credit limits for no apparent reason, changed the terms of a card’s rewards program or eliminated their card’s rewards program altogether. Additional information about credit card usage and management may be found on the CPB’s website at www.nysconsumer.gov.

The CPB respects and advocates for strong and reasonable information privacy policies. Therefore, answers to the survey are completely anonymous. However, the CPB may publish survey results and portions of stories it receives to help illustrate the impact of credit card reform. In the interest of personal privacy, however, the CPB will never use the name of a consumer without expressed written permission.

The CPB, established in 1970 by the New York State Legislature, is the State’s top consumer watchdog and think tank. The CPB’s core mission is to protect New Yorkers by publicizing unscrupulous and questionable business practices and product recalls; conducting investigations and hearings; enforcing the “Do Not Call” law; researching issues; developing legislation; creating consumer education programs and materials; responding to individual marketplace complaints by securing voluntary agreements; and, representing the interests of consumers before the Public Service Commission and other State and federal agencies.