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CARD ACT provides Debtor Rights for Credit Card Holders in New York

Provisions of the Credit Card Act of 2009 have been fully implemented and are meant to offer added protection to consumers by outlawing some of the most abusive practices of credit card companies.

Those dealing with CARD Act violations in Great Neck or collection agency harassment in New York City should speak to a qualified New York debtor rights attorney. Collection companies in particular have a long history of violating the law in an effort to collect a debt.And not all cards or credit accounts are being treated equally.

U.S. News reports on the case of a business customer who has $41,000 worth of cash advances at 20 percent interest and $14,000 in purchases at 9 percent. His bank refused to allow him to pay off the higher-interest amount first, something mandated by the new credit card regulations. However, the regulations only apply to personal accounts, not business accounts.

In some cases, companies are even accused of pushing such “professional accounts” onto unsuspecting consumers. Some credit card companies, including Bank of America and Capital One, have applied some or all of the CARD Act protections to business accounts. Others, including Chase and Citibank, have not done so, according to a recent study published by Card Hub.

Protections afforded by the CARD Act include:

-Limited interest rate hikes on existing balances: 45-days’ notice required for change of terms.

-Limited Universal Default: This is the practice of raising your interest rate based on your payment history with other creditors. It can now only be done with new balances after a 45-day written notice.

-Opt Out Rights: Consumers can reject certain changes in terms. They can agree to close the account and are given up to 5 years to pay off the balance.

-Limited credit for young adults: Companies are banned from issuing cards to anyone under 21 unless they have an adult co-signer or have proof of income. Credit card companies must also stay 1,000 feet from college campuses if they are offering free gifts to entice students to sign up.

-More time to pay monthly bills: At least 21 days.

-Clearer due dates and times: Payments due on weekends or holidays are no longer subject to late fees.

-Limits on over-limit fees: Consumers must opt-in for such fees and they cannot exceed the amount of the overage. Thus a $20 overage cannot result in more than a $20 late fee.

-No double-billing cycles: This practice hurt people who paid off their bills in full every month, as the companies went back to the previous month’s balance when figuring interest.

-Subprime credit: Setup fees cannot eat up more than 25 percent of available credit.

-Minimum payment: Companies must disclose consequences of only making minimum payments.

-Late fee restrictions: Fees are capped at $25 but can be higher if user is late more than once in a six-month period.

The Law Offices of Ira S. Newman represents businesses and consumers dealing with issues of creditor or debtor rights. Call 516-487-7375 or contact us through the website.