How Does the Fair Credit and Charge Card Disclosure Act Help You?
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Full Disclosure
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Using a credit card to pay for goods and services is almost commonplace in our society. Of the nearly 1 billion credit cards issued around the world, almost 450 million of them belong to Americans, according to credit.com statistics. With these cards comes responsibility not just for the consumer but for the creditors as well. The Fair Credit and Charge Card Disclosure Act is designed to help. This article will explain how that act affects you and the creditors.
Preapproved? Read The Terms
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Consumers regularly receive preapproved credit card applications in the mail. They may have even seen online offers of credit cards making promises such as no interest for a set amount of months or introductory interest rates. It is legal for companies to do that. However, the Fair Credit and Charge Card Disclosure Act also forces the creditors to let you see beyond those introductory offers.
As per the Fair Credit and Charge Card Disclosure Act, passed by Congress in 1988 as an amendment to the Truth in Lending Act, credit card issuers must disclose, in a table format or directly, the varying rates as they apply to the credit card. They must also disclose any minimum finance charges, transaction fees and how they compute all charges. If a company sends you a preapproved offer, it must be included. Typically they are outlined on an envelope insert. -
Notification of Changes
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Not only do the creditors have to list all those terms of the card, they must present them at least 30 days in advance of issuance or the day of issuance. This keeps you in the loop of what other charges besides your future purchases will be, to include annual fees and when charges are due. If you choose not to renew your card, the credit card company must also give you an opportunity to cancel the card before any renewal fees are applied. If a credit card offers insurance and there are changes in rates or coverage, the Fair Credit and Charge Card Disclosure Act states those creditors must inform you of those changes within 30 days.
If you feel that you have not received fair legal treatment by your credit card company, you should contact Federal Reserve Consumer Help (see Resources).
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