The Federal Deposit Insurance Corporation (FDIC) is the government body that regulates credit cards by way of the Truth in Lending Act. There are a number of regulations that require lenders to openly advise consumers of various rates and rules that apply to their credit cards. The government regulations for credit cards also infer certain rights to consumers who use the cards.
Disclosures
According to analysts at the Federal Reserve Board, applications for credit cards must disclose pertinent facts about the loans such as the annual percentage rate, including special incentive periods and when they will expire. It must clearly state how various transactions are rated, such as cash advances versus balance transfers, straight purchases and penalty fees. The disclosure box must contain information about annual fees, the grace period for repayment of purchases and minimum finance charges.
Liability limits
The Truth in Lending Act requires credit card companies to provide assurances to consumers that they won't be billed for any more than $50 if their credit card is lost or stolen or used by an unauthorized user. Credit card insurance is not required to obtain this protection. Once a credit card is reported stolen, the credit card company must cancel the account and refuse any new credits.
Errors
Consultants at the Federal Reserve Board report that credit card errors and damage to credit card purchases are covered under the Fair Credit Billing Act. Consumers must report errors on their bills, such as math errors, being billed for something the cardholder did not purchase or billed amounts that vary from the original agreement, within 60 days of the statement date of the bill that held the error. The account must be corrected and the consumer cannot be charged finance charges on the incorrect amounts.
Consumer protection
The Credit Card Accountability, Responsibility and Disclosure Act of 2009 was signed into law by President Obama and provides credit card users with a wealth of new changes that affect how credit card companies can sell and market their cards and how they bill customers. The ability of credit card companies to invoke interest hikes has been reduced and the practice of raising rates on consumers with poor payment histories must desist. Consumers must have clear directions on when credit card payments are due and must be allowed at least 21 days to make a payment from the time the bill was mailed. Payments must now go toward the highest interest rates on goods and services for each card, unlike in the past when lowest rated charges were paid off first. When payments are due on weekends or holidays, late fees cannot be charged for those days. Consumers now must agree to have their credit limits raised instead of being charged fees for going over their limits. Issuers of credit cards must disclose to consumers how long it would take to pay off an existing balance if the consumer only made the minimum payment. Bills also must disclose monthly the total amount that would be paid to the credit card company, including interest, if minimum payments are made.
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