North Carolina Department of Justice

North Carolina Department of Justice

North Carolina Department of Justice
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New Protections for Credit Card Holders


By Attorney General Roy Cooper

Approximately 181 million Americans have a credit card, according to estimates by the U.S. Census Bureau.   If you’re one of them, then you need to know about a new law designed to protect people with credit cards.
Starting next week, credit card companies will have to change their ways to give you more notice about changes to your account, better protection from sudden rate increases, and fairer billing and payment practices. The protections are part of a new law, the Credit Card Accountability, Responsibility, and Disclosure (CARD) Act of 2009, which takes effect February 22.
Nearly 600 North Carolina consumers complained to my office last year about credit card interest rates and fees. People told us about unexpected interest rate hikes, which applied not just to future purchases but also to any existing balance. They complained about bills sent to them so late it was nearly impossible to get their payment in on time, and ever-changing due dates.
While the Credit CARD Act won’t solve all of your credit card woes, it will help with some of these common complaints.
If you have a credit card, here’s what the new law means for you:
  • Advance notice of changes to your credit card agreement. You’ll get 45 days’ notice before your interest rate rises or fees such as late fees, cash advance fees or annual fees increase.
  • No interest rate hikes during the first year you have the card, unless you signed up for a promotional interest rate which is set to expire. Promotional rates must last at least six months.
  • Interest rate increases apply only to new purchases—not your existing balance—unless you fail to make at least the minimum monthly payment for 60 days. Also, your rate can’t rise because of unrelated bills you haven’t paid, such as utility bills.
  • Better billing practices. Your credit card bill must be sent 21 days before it’s due, and it will be due the same time each month. Payments received up to at least 5 PM on the due date will be considered on time.
  • Better information about how long it will take to pay off your card. Your bill will tell you how long it will take to pay off your balance if you make only the minimum payment each month, and how much you’d have to pay per month to pay it off in three years.
  • Payments must go to high interest balances first. Anything you pay beyond the minimum payment must be applied to your highest interest balances first.
  • New protections for younger consumers. To prevent young consumers from being saddled with debts they can’t afford, people under 21 years old will have to show that they can make the payments or have a co-signer in order to get a credit card.
Keep in mind that the new law won’t wipe out your credit card balance, lower your monthly payments or lock in your current interest rate forever.  Other key tips for credit card holders:
  • Read any information your credit card company sends you carefully. The new law requires advance notice on rate and fee hikes, but that won’t help if you don’t read it.
  • Watch out for new fees. Some credit card companies may try to come up with new fees, such as monthly maintenance fees, or switch from fixed to variable interest rates, practices not regulated by the new law.
  • Also, review your credit card bills carefully. If you see any charges you don’t recognize, report them to your credit card company right away to cut down on fraud.
  • Stop unwanted preapproved credit card offers from clogging your mailbox. Call 1-888-5OPT-OUT or opt out online. You’ll be asked to provide some personal information that will be used only to process your request.
  • If you owe more in credit card debt than you can afford to pay, seek help from a non-profit credit counselor.  Never pay money upfront for debt relief help. To find a reputable non-profit consumer credit counseling service in your community, contact the National Foundation for Credit Counseling at 1-800-388-2227 or
This new law is a start, but Congress still needs to do more to protect consumers from unfair practices by credit card companies, banks and other financial institutions. Creating an independent Consumer Financial Protection Agency to set national rules for the financial services industry would help consumers and our economy.