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How does the CARD Act protect consumers?

Many Long Island residents struggling with debt feel as if credit card companies have all the power. And for a long time, it's true, their power ran virtually unchecked.

Consumers could find their interest rates or other terms changing unexpectedly. They might have difficulty in obtaining important information about their own accounts and balances. And missing payments to one company might suddenly lead to punitive measures taken by a consumer's other credit card companies -- even if the consumer didn't miss a payment on those other cards.

Then, in 2009, the Credit Card Accountability Responsibility and Disclosure Act was passed into law. The CARD Act, as it is known, was designed to protect consumers dealing with credit card debt from certain types of practices. How, our readers may wonder, does the CARD Act protect them?

For one thing, companies' practice of "universal default" has been virtually eliminated. This means that a delinquent payment to one credit card company can't be used by other companies as an excuse to hike your interest rates. And payment can't be considered "late" unless the statement was mailed to the consumer 21 days or more before the payment's due date.

There are additional provisions in the CARD Act designed to make important information more accessible to consumers. These include 45 days' advance notice of changes to the cardholder agreement (including rate increases). They also require disclosure of how long it will take a consumer to pay off the balance in full.

Long Island residents struggling with credit card debt should look more closely at the CARD Act protections. A legal professional may also be able to help determine whether your creditors' actions have been legitimate, in addition to advising on specific debt strategies.

Source: Findlaw.com, "Credit Card Rules and the CARD Act," accessed on Dec. 4, 2015

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