The Credit Card Accountability Responsibility and Disclosure Act of 2009 (commonly known as the Credit Cardholders’ Bill of Rights) is a federal law that is designed to protect credit cardholders from unfair practices by credit card companies. Below is a list of some of the important rights this law grants you.

Interest Rates

  • Your regular interest rate cannot be increased during the first 12 months of opening a credit card unless you are more than 30 days late with a payment. Promotional interest rates must last at least six months.
  • An interest rate increase can only apply to new charges, not the pre-existing balance. This rule does not apply if you are past due more than 60 days.
  • If your interest rate was raised due to making a payment late, the card issuer must reinstate the lower interest rate if you make on-time payments for six months.
  • You must be given at least 45 days notice of an interest rate increase.
  • Universal default clauses are prohibited, meaning a creditor can no longer raise your interest rate because you were delinquent with another creditor.


  • You cannot be charged an over-the-limit fee unless you authorize your credit card company to process over-the-limit transactions. If you do provide authorization, you can only be charged one over-the-limit fee per billing cycle.
  • You cannot be charged a fee for paying your bill on-line or over the phone, except for expedited (last-minute) phone payments.
  • The amount of any fee charged must be reasonably related to the actual cost the creditor incurred as a result of your action.

Billing Practices

  • If you have balances with different interest rates and pay more than the minimum required amount, the extra payment must be applied to the balance with the highest interest rate.
  • Your balance cannot be calculated using the double-cycle billing method (which uses your daily balance over the past two billing periods).
  • Your statement must be mailed to you at least 21 days before the due date.
  • If your due date falls on a weekend or holiday, your payment is considered on time if it is made on the next business day.
  • If a mailed payment is received by 5 PM on the due date, it cannot be marked late – a creditor cannot set a deadline of 11 AM or another earlier time.

Restrictions for Young Adults and Teens

  • Consumers under the age of 21 must have a co-signer over the age of 21 or independent means of repaying the balance (such as a job) to obtain a credit card.
  • For joint accounts held by a person under 21 and an adult, the card issuer must get approval from the adult to increase the credit limit.
  • Consumers under the age of 18 cannot have a credit card unless they are emancipated. However, they can still be an authorized user.

1. If your creditors allow you to make your payments on-line, take advantage of it. That way, you don’t have to worry about your payments getting lost or delayed in the mail.

2. Write your due dates on your calendar (paper or computer) so you don’t forget about them.

3. Leave your credit cards at home in a safe place when you don’t plan on using them. This reduces the likelihood of them getting lost or stolen.

4. Always check your monthly statements for errors and unauthorized charges. Contact your creditor immediately if you notice any.

5. Many creditors close accounts that have not been used in several months. This can hurt your credit score. Try to make a small purchase on every card each month, but never charge more than you can afford to repay.

6. Having one or two store credit cards is not necessarily bad, but avoid saying yes every time a cashier asks you if you want to apply for one. You may get a discount on that day’s purchase, but store cards tend to come with extremely high interest rates.

7. Avoid getting cash advances on your credit cards. The interest rate is typically higher than the one for purchases, and there usually is no grace period as well.

8. Think twice before agreeing to co-sign on a credit card or loan for a friend or family member. Even if you are not making the purchases or borrowing the funds, late or missed payments can be reflected on your credit report.

9. If you are having trouble making your payments, talk to your creditors. They may allow you to skip or make lower payments for a few months.

10. Think carefully before transferring a balance to a credit card with an introductory teaser rate. What is the interest rate once it expires? What is the balance transfer fee? If they are high, it may not be worth it.

Zero Debt: The Ultimate Guide to Financial Freedom (Updated second edition)
By Lynnette Khalfani-Cox (Advantage World Press 2009)

Do you have credit card or other debt? If so, you may want to pick up a copy of Zero Debt. The author paid off $100,000 in credit card debt in three years and shares the strategies and knowledge she discovered in the process. The book contains a 31-day plan for getting back on track financially – not just taking control of your debt but creating a realistic budget and improving your credit score too. For example, on Day 3, you call your creditors to get up-to-date information on your accounts and write down all of your debts on a piece of paper. On Day 18, you find 10 ways to cut your spending. For those these feeling overwhelmed and not quite sure where to start, having the concrete plan of action that the book provides makes achieving financial freedom feel within reach.

Copyright © 2009 BALANCE
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