Essay Credit Card Act

1594 Words Apr 13th, 2016 7 Pages
The Credit Card Act President Obama signed the Credit Card Accountability, Responsibility, and Disclosure Act, or the Credit Card Act, on May 22, 2009. The objective of the act is to make credit card policy fairer and more transparent for the consumer to better understand the implications of credit card use. There are a number of young consumers who may have accessed a credit card either in effort to start building their credit, or because their parents got them a credit card, in which case the user does not fully realize the details of owning a credit card, and the implications in long-term financial planning. On average, by the end of 2009 the typical American consumer had around $5,400 in credit card debt (Sidel 1). Any adult user …show more content…
There are many provisions that improve the consumer’s ability to understand the risks and benefits of their credit card use. In §164(a)(2) the specific time a payment is due on a date must be stated in a “readily identifiable form”. This is important in many scenarios. For example, someone can open up a credit card in New York City, and relocate to Los Angeles, and then make a payment on 4pm PST of the due date, yet face a penalty because the credit card restricts payments to 5pm EST. By clarifying in emails, letters, or any notification to the consumer that the payment is due by 5pm EST, it increases the consumer’s awareness of the deadline. In §201, a “minimum payment warning” must be provided that clarifies only paying the minimum payment will prolong the process of paying a credit card off, and will also result in paying more interest over that extended time. Not everyone understands that the minimum payment is primarily interest and does not work toward paying the credit card. It would be beneficial for credit cards to supply matrixes to consumers, in which minimum payment takes x months, double payment takes x months, triple payment, and so on. In §301, credit card holders must be at least 21 years or older, unless they have a co-signer. This is important for young consumers. At age 17 my mother asked me to take out a credit card in Macy’s so she could get a discounted

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