The Credit CARD Act, signed into law by President Obama, will make credit card terms more transparent and eliminate many fees and arbitrary rate hikes now charged by credit card issuers starting February 22, 2010.

Test your knowledge of the new consumer protections created by this law below and then:

Read more about the new Credit CARD Act
Find out how the new law will impact Union Plus Credit Cardholders

Before the CARD Act, your credit card issuer was allowed to raise your interest rate on your existing balance and new purchases, as long as it sent you a written notice at least 15 days before the changes. That’s changed. Not including short-term teaser or introductory rates, which of the following protections apply? Your credit card issuer:
1. Cannot raise the rate on your existing credit card balance unless you are 60 days late with a payment
2. Must give you 45 days advance written notice before raising your rate. The new rate can only apply to new purchases, and you have to be given the chance to reject the new terms and pay back your balance at the current interest rate.
3. Cannot force you to pay back your entire balance immediately if you decide to cancel your card rather than accept a rate increase
4. All of the above
If a credit card issuer offers a low introductory rate (a.k.a. “teaser” rate), it must last for at least:
1. Three months
2. Six months
3. One year
4. None of the above, teaser rates are not allowed
Which of the following changes can you expect to see when it comes to over limit fees?
1. Over limit fees are no longer allowed.
2. An over limit fee can be charged only if you go over your limit more than once in a billing cycle.
3. Before an over limit fee is charged, you have to give the credit card company permission to authorize purchases that will put you over your limit.
4. Over limit fees are capped at $10 per instance.
Many cardholders have complained about unfair billing practices. Which of the following are not allowed under the Credit CARD Act:
1. Counting a payment as late if it doesn’t arrive by 1 pm on the due date
2. Floating due dates that change periodically
3. Counting a payment as late even though it arrived the day after a weekend or holiday when there was no mail delivery
4. All of the above
The CARD Act includes several measures designed to help protect consumers under the age of 21. Which of the following is NOT a protection offered under the CARD Act:
1. Anyone under the age of 21 must take a basic financial literacy course before obtaining a credit card
2. Issuers may not send prescreened credit card offers to anyone under the age of 21 unless they agree in advance to receive them
3. Those under 21 must either get someone over 21 to cosign, or provide the credit card company with proof that they have enough income to pay back the debt
4. Card issuers may not give students under 21 tickets, T-shirts or other gifts in exchange for completing credit card applications on campus or at school-sponsored events
It is not unusual to have a credit card balance with more than one interest rate. For example, part of your balance may carry a very low interest rate because you used a balance transfer offer, while another part may carry a higher interest rate from purchases or cash advances. How will the new law change how your payments are applied to balances with different interest rates?
1. All payments must first be applied to the part of the balance with the lowest interest rate
2. Your card issuer can apply the minimum payment amount as it chooses, but any amount above the minimum payment will be applied to part of the balance that carries the highest interest rate
3. You will now be able to choose how you want your payments applied
The Credit CARD Act will clamp down on cards that have been dubbed “fee harvester” cards. A fee harvester card is:
1. Any credit card where late, over limit and bounced check fees total more than 25% of the credit limit in the first year
2. A credit card where unavoidable fees account for more than 25% of the credit limit in the first year
3. A prepaid (debit) card that charges three or more fees each month
Which of the following disclosures are you NOT likely to see on your statements in early 2010?
1. The total time and cost required to pay off your current balance if you just make minimum payments
2. The amount you must pay each month if you want to pay off your current balance in three years or less
3. A toll-free number for a non-profit credit counseling service
4. The fee for making a late payment and when it may be charged
5. The amount of annual bonuses received by the card issuer’s chief executives
Advertisements with catchy jingles for “free credit reports” have been criticized by consumer advocates as misleading consumers into buying credit report services. True or false: The CARD Act will forbid advertisers of credit report services from using the words “free credit report” in their ads.
1. True
2. False
Some card issuers charge cardholders a fee for paying their bills online, by phone, etc. Some of these “pay to pay” fees will be banned under the CARD Act. Which of the following will still be allowed?
1. Fees for online payments
2. Fees for payments by phone
3. Fees for payments made with the help of a customer service representative
4. Fees for payments made at a local branch office

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