The Credit Card Accountability Responsibility and Disclosure (C.A.R.D.) Act of 2009 is designed to protect new credit card users from unscrupulous practices. In protecting consumers, this act adds some key rules and regulations that protect consumers without encouraging unsound credit practices. See the full article for details:

Key elements of the CARD act address some of the most abusive practices of some card issuers, including:

• Double-cycle billing, in which your balance in the prior cycle affects interest charged in the current cycle, is now prohibited.
• If the card issuer is a bank and they accept payments at their branches, they can no longer delay applying your payment for a few days. Instead, you must get credit for the payment on the same day you made it at the branch.
• If your payment is due on a holiday or weekend, and your payment arrives the next business day, it must be considered to have been made on time.
• If your payment arrives by 5 PM, it must be considered to have been made that day. The card issuer cannot set an earlier deadline.
• Your payment due date must be the same day of the month every month.
• While there are some exceptions allowing properly disclosed temporary promotions lasting at least 6 months, and allowing a variable interest rate tied to an index, the rate you are initially offered is locked in for a year unless you do something that violates the terms of your agreement with the card issuer. Even so, you have to do something like be at least 60 days past due and be given 45 days advance notice, during which you can reject the increase, close the account and gradually pay it off at the old rate.
• After the first year your account has been open, the interest rate on your existing balances cannot be raised except:
  • If your rate is tied to an index (such as the prime interest rate), it can go up (or down) with the index.
  • If your interest rate is raised for a payment that is over 60 days late, you must get 45 days notice that it is going up, have the ability to reject the increase, close the account, and gradually pay it off at the old rate. You also must be told that if you make payments on time for 6 months, your interest rate increase will end.
  • Your rate can be increased due to “market conditions” or “credit risk”, but your account must be reviewed every 6 months and your rate must be decreased if warranted. The Federal Reserve Board is required to issue more detailed rules to regulate this aspect of the law.
• Penalties for going over your limit or making a late payment must be “reasonable”- rules for what is “reasonable” are determined by the Federal Reserve Board.
• Only one over-limit fee can be assessed per billing cycle.
• The only time that fee that can be charged in connection with for making to your card issuer is if a live operator helps you make an expedited payment by phone. For example, no fees can be charged by your card issuer for making payment online, by mail, or in person.
• Credit card statements have to be issued at least 21 days before their due date.
• Payments must be applied to the balances with the HIGHEST interest rate before they are applied to lower interest rate balances, except that, if you have a balance where interest was temporarily deferred, your payments can first be applied to that balance during the last 2 months before the interest deferral expires.
• Sub-prime fee harvesting – a practice where credit cards are issued primarily for the purpose of collecting a fee for issuing the card – is discouraged by the act. If the issuance fee is more than 25% of the credit line extended by the card issuer, then the available credit cannot be reduced by the amount of the fee. For example, if the credit line is $400 and the fee for issuing the card is $125, then all $400 must be initially be made available to the cardholder.
• Promoting credit cards to people under 21 is now discouraged. Sending pre-approved card offers to people under the age of 21 is now illegal without prior permission. Since pre-approved offers are generally sent out unsolicited by card issuers who contract with a credit bureau and buy a list of people with a credit score in a particular range, this provision of the law should dramatically reduce this behavior. New credit cards cannot be issued to people under age 21 unless the applicant applies with a co-signer who will be jointly liable for debts that the applicant incurs before reaching age 21, or if the applicant provides information that indicates some independent means that will be used for making repayment for credit extended through the account.
  
• Promoting credit cards at colleges is now discouraged. Colleges must now publicly disclose terms of their partnerships with credit card promotions – and many will avoid such partnerships rather than disclose their terms. Certain practices common at college credit card promotions are now banned, such as giving tangible gifts with monetary value in exchange for applying for a card.
• Card issuers must now let clients know that they can get a free credit report with no strings attached from annualcreditreport.com