Getting to Know the
NEW!
Credit Card Rules:
Credit CARD Act of 2009
February 22, 2010
Communicate with Consumers
CHANGE
COMING
Communicate What? When?
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Interest rate increases
Fee Changes
Other significant changes
45 Days
Notice
Required
Interest Rates
When Changes are Coming:
Accept changes
Decisions
Exceptions

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Variable interest rate
tied to index
Introductory rate
expires
Fail to make
payments as agreed
45- day
Notice
Time to Pay Off Balance
New balance
$3,000
Minimum payment due
$90.00
Payment due date
9/20/XX
Late payment warning: If we do not receive your minimum payment by
the date listed above, you may have to pay a $35 late fee and your APRs
may be increased up to the Penalty APR of 28.99%.
Minimum Payment Warning: If you make only the minimum payment
each period, you will pay more in interest and it will take you longer to pay
off your balance. For example:
If you make no additional
You will pay off the
And you will end up
charges using this card and
each month you pay. . .
balance shown on this
statement in about. . .
paying an
estimated total of
Only the minimum payment
$103
11 years
3 years
$4,745
$3,712
(Savings +$1,033)
Rate, Fee and Limit Changes
Interest rate
increases
for the first
year
Exceptions

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Variable interest rates
Introductory rate ends
60+ days delinquent
Non-compliance in workout agreement
Exceptions
Increased rates apply only to
new charges
Do not apply
Increased rates apply
Over-the-limit (O-T-L)
transactions
Opt-in
 Allows o-t-l
transactions
 Only one fee per
billing cycle
 Can be revoked at
any time
Opt-Out
 No o-t-l
transactions
 No fees if o-t-l
transaction slips
through
Limits high card fees



Annual fees, application fees, etc.
Capped at 25% of initial credit limit
Example:
Card limit
$500
x .25
Max first year fees
$125
Exception: Does not apply to penalty fees
Standard Payment Times

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Must receive bill 21 days before due
Consistent due date
5:00 pm cut-off
Weekend/holiday provisions
Fair Application of Payments

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Payments above minimum applied to
highest interest rate first
Exception: Deferred interest plan
Consumers:

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Pay less interest
Get out of debt faster
Ends Double-Cycle Billing

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Two-cycle billing bases finance charges on both
the current and previous balance
More costly to consumers
Finance charges will now be computed only on
current cycle purchases
Deceptive Marketing of Credit
Reports
Advertisements for free credit reports
must disclose that free credit reports are
available under Federal law at:
www.AnnualCreditReport.com
Restricts Cards to Students

Applicants < 21 must have
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Adequate income OR
Cosigner OR
Completion of certified financial literacy course
Restricts credit limit increases
Limits prescreened offers
Restricts promotional gifts
Disclosure of marketing contracts
Establishes Gift Card Protections

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Five year expiration limit
Limits inactivity fees
Yields to stronger state laws
Covers both retailer gift cards and prepaid
general use gift cards
Limitations to coverage
Summary: Changes address

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Communication requirements
Rate and fee increases
Balance pay-off data
Over-the-limit restrictions
Protections for underage consumers
Billing and payment structure
Deceptive marketing of credit reports, and
Gift card protections
Any Questions?
For more information about managing money,
credit, saving and investing ask about the LSU
AgCenter’s Saving and Investing for Life (SAIL)
Program.
References
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Board of Governors of the Federal Reserve. (2010). What
you Need to Know: New Credit Card Rules.
Consumer Union. (2009). Upcoming Credit Card
Protections.
Johnson, C. & Gorham, E. (2009). Credit CARD Act of 2009:
The changes and when they take place. Extension Extra.
South Dakota State University Extension Service.
McFadden, L. (2009). 8 major benefits of new credit card
law. Retrieved from www.Bankrate.com 7.1.09
Prater, C. (2009). What the new credit card reforms mean to
you. Retrieved from www.CreditCards.com
The White House. (May 22, 2009). Fact Sheet: Reforms to
Protect American Credit Card Holders. Retrieved 7/2/09
from www.whitehouse.gov/the_press-office/Fact-SheetReforms-to-Protect-American-Credit-Card-Holders
Developed by: Jeanette Tucker, Ph.D., LSU AgCenter
Visit our Web site www.lsuagcenter.com
Louisiana State University Agricultural Center, William B.
Richardson, Chancellor
Louisiana Agricultural Experiment Station, David Boethel,
Vice Chancellor and Director
Louisiana Cooperative Extension Service. Paul D. Coreil,
Vice Chancellor and Director
Pub. 9/09
Issued in furtherance of Cooperative Extension work,
Acts of Congress of May 8 & June 30, 1914, in
cooperation with the United States Department of
Agriculture. The Louisiana Cooperative Extension
Services provides equal opportunities in programs and
employment.