The Credit Card Act And Its Importance

The Credit Card Act, or the Credit Card Accountability, Responsibilty, and Disclosure Act, was passed in 2009 to protect credit card holders from excessive lending practices by those who issue credit cards. Credit Card Act was created to prevent abusive credit card practices. Interest hikes was one of these abusive practices. Companies would raise interest rates without notifying the cardholder. In most cases, there was no reason for this increase. It worked in the companies’ favor as the customers couldn’t do anything. Marketing to young customers is also a factor. Credit card use was promoted by companies in areas with a high concentration of minors. They visited High Schools to lure students’ attention. The random charges and obfuscation were the most important factor. The charges were automatically applied to the account without any explanation. Credit card issues have not been major since the new legislation. There aren’t any random rate changes or arbitrary feeds. Grace periods are better (21 days prior to due date) as well as more protection for underage customers. The Credit card Act has been in place for 10 years. There have also been social changes that affect the way people view credit. Since 2009 student debts have risen dramatically leaving more young people in debt after university. The credit accounts are growing, but not at the same rate as they were in past years. People may also explore alternative ways of financing their lives, especially since we have a total credit card debt in the US of a trillion dollars and it continues to rise. The credit card act is a very important tool in controlling national debt. Consumer spending and credit card debt are regulated. The act was designed to protect consumers, and I am always in favor of that. To make credit cards more difficult to obtain, I would limit them to those with the right qualifications. This is to prevent people from getting into debt because they can’t afford a credit card. It’s a spiral downward that will only worsen in many cases. This has happened to me too often in my life. I support a reform that would require all credit companies to issue credit cards.