Many people with a bad credit history are unfamiliar with the terms of their credit contracts. It is important to read over your agreements to avoid being stuck with unexpected charges. However, in 2009, President Obama signed the Credit Card Accountability Responsibility and Disclosure (CARD) Act to protect consumers against unfair creditor practices.
This legislation says that credit card companies cannot impose arbitrary interest rate increases, requiring that cardholders receive a 45-day notice of any interest hikes. It also allows consumers to cancel their accounts (although they are still responsible for the existing balance) if they do not agree with the new terms.
Under the terms of the bill, the card companies must also mail out bills 21 days before they are due and consider any payments prior to 5 p.m. on the due date as "on time." They are also forbidden from charging interest to consumers who have settled their debt in a timely manner, which is referred to as "double-cycle billing."
The Credit CARD Act of 2009 aids consumers with the terms of a contract, which can often be confusing. A better understanding of credit leads to better financial standing, which ultimately results in securing the best car loans and mortgages.