The Meaning of Credit Cardholders Bill of Rights

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As soon as President Obama signs the “Credit Cardholders Bill of Rights” into law, you need to know how it will affect your credit card use. If you are a student or minor, this law will affect you the most.

It’s expected that President Obama will sign into law the bill named “Credit Cardholders Bill of Rights” this Friday.

The House of Representatives agreed to adopt the “Bill of Rights” version of the Senate. This law has the highest level of impact for students and minors.

For college students without a co-signer, the maximum credit amount that can be extended is limited to $500 or 20% greater than their annual gross income. For all their credit cards, it will be limited to only 30% of their annual gross income. Furthermore, creditors are prohibited from giving a credit card account to any college student without any verifiable income source.

Meanwhile, consumers below 21 years old or minors would need the signature of a responsible adult or parent to take responsibility for their debt. Otherwise, proof that the minor has the ability to repay the credit is required.

For everyone who has credit cards, here are some rules where you’ll be impacted:

Payments – if the consumer pays above minimum, the excess payment should be applied to the balance with the highest rates. Creditors are also required to provide grace period for payments.
Interest Fees – creditors can no longer charge outstanding balance fees at the billing period’s end if the fees are attributed to the accrued interest on outstanding balance fully repaid in the preceding billing period.
New Accounts – creditors can’t increase APR (annual percentage rate) during the first year of a new account.

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The Meaning of Credit Cardholders Bill of Rights

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