Consumer Protection Laws for Credit Cards
Several laws exist that give consumers ample protection against credit card companies and unfair debt collection practices. These laws require credit card companies to deal transparently with consumers and making it illegal for them to engage in practices that seek to hide fees and trap card holders in a never-ending cycle of debt.
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Credit Card Act of 2009
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As of 2009, the Credit Card Act limits when credit card companies can raise interest rates on existing cards and makes deceptive billing practices such as hidden fees and minimum payments that won't reduce the card balance illegal. Credit card companies also are required to inform consumers of significant changes to credit card agreements at least 45 days before the new terms take effect. Credit card holders have the right to cancel or close the credit card account if they find the changes unfavorable.
Other Credit Company Disclosures
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In accordance with the Credit Card Act of 2009, credit card companies are required to tell you how long it will take to pay off your balance making only the minimum payment each month. Your credit card company is also required to inform you how much interest you will have paid on the account once the balance reaches zero if you only pay the minimum amount each month. The rule is designed to provide you with fair warning that paying only the minimum will end up costing you more money in the long run.
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Fair Credit Reporting Act
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The Fair Credit Reporting Act gives you the right to view your credit report from all three major credit reporting bureaus once per year at no charge. You may view your credit report any other time you wish, though you might be assessed a fee by the providing agency. The law also gives you the right to contest information contained in your report. For example, if a credit card company has reported an account delinquency in error, you have the right to request an investigation and have the incorrect information removed from your credit report.
Fair Debt Collection Act
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The Fair Debt Collection Act provides you with protections in the event your credit card or other credit accounts become delinquent. Under this law it is illegal for a debt collector to contact you at inconvenient times and places restrictions on the hours a debt collector can call your home -- 9 a.m. to 9 p.m. You also have the right to file a complaint with the Federal Trade Commission if a debt collector violates your rights through the use of harassing language or intimidation.
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