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The CARD Act and Coping with Credit Card Debt

Law Office of Ronald V. De Caprio April 3, 2015

Nearly six years ago, President Obama signed into law a bill that sought to protect consumers from the confusing and sometimes abusive practices of American credit card companies. Called the Credit CARD Act, or the CARD Act for short, the law prevents credit card companies from hiding card terms from consumers and changing those terms on cardholders in their systems. Generally, the law’s goal was to protect New York residents and other Americans from the damaging practices of some aggressive creditors.

One of the main reasons that the CARD Act was created and passed was to bring clarity to credit cards’ contractual terms. Many consumers struggle to understand exactly what they are signing up for when they get new credit cards; that failure to understand repayment and interest terms can land some consumers in debt when they are unable to meet the requirements of their new creditors’ terms. Under the CARD Act, Americans should be able to compare different cards to evaluate which ones best serve their financial goals and needs.

The other reason that the CARD Act became law was to limit credit card companies’ ability to penalize card holders for misusing their available credit. Some credit card companies let their card holders use more credit than they were originally authorized to use and then imposed punishments on those card holders for going over their limits. Other manipulative and abusive practices by credit card companies are also addressed by the CARD Act.

Though the federal government has tried to help Americans avoid troubling credit card debt, such debt is still a big problem for many people. Those individuals who cannot break the debt cycle have options for getting their financial lives back on track. To learn more about debt relief and options for managing creditor obligations, interested parties may consider working with lawyers who work in the bankruptcy field.