New Credit Cardholder Protections in Effect August 22

Press Release

Congresswoman Tammy Baldwin announced today that two consumer protections resulting from the Credit Cardholders' Bill of Rights will go into effect on Sunday, August 22. The President signed the bill in May 2009 and most of the bill's provisions became effective in August 2009 and February 2010.

As of August 22, in addition to the tough consumer protections already in place, credit card companies that raise your interest rate must re-evaluate that rate increase every 6 months and, if appropriate, reduce that rate within 45 days after completing the evaluation. Additionally, penalty fees for such things as late payments must now be deemed reasonable and proportional.

"These and other new consumer protections recently enacted translate into hundreds, if not thousands, of dollars in savings for individual households in South Central Wisconsin because Congress said "Enough is Enough' to the credit card companies," Baldwin said. A recent report from the Pew Charitable Trust called the Credit Cardholders' Bill of Rights "a major milestone in the move to make credit cards safer, transparent and more fair for consumers."

Other key consumer protections in the Credit Cardholders' Bill of Rights that went into effect in August 2009 and February 2010:

* Prohibit retroactive interest rate hikes on existing balances.
* Ban double-cycle billing (charging interest twice on balances paid on time).
* Ensure fairness of due dates, including requiring statements be mailed 21 days in advance of the payment date and requiring the payment date to remain the same each month.
* Require 45-days' advance notice of interest rate, fee and finance charge hikes.
* Strengthen credit card protections for young people.
* Require that billing statements from credit card companies be clear, be in plain English, and show how long a balance will take to be fully paid off if only the minimum payment is made.

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