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The Credit CARD Act of 2009 Impact on Union Plus Credit Cardholders

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.

The AFL-CIO, Union Privilege and other labor, national and state consumer, civil rights and community organizations joined together to help pass the stronger credit card reform legislation.  Union Privilege - the non-profit that provides the Union Plus benefits - is a member of the Americans for Financial Reform Coalition.

The chart below recaps the major elements of the law and how it will affect Union Plus Credit Cardholders. 

The Union Plus Credit Card does not engage in many of the practices that are targeted by the legislation, and has long been a leader in developing consumer-friendly practices and protections for union members and their families including a rate cap and help for cardholders facing financial hardship.

Interest Rates

Credit CARD Act Provision Impact on Union Plus Credit Cardholders
No interest rate increases on existing retail and cash balances except when 60 days late Union Plus credit cardholders will never get rate increases on existing retail and cash rate balances
Issuers may still raise rates for future transactions for any reason Union Plus has strict rules about what will trigger the default rate for future transactions
If an account is increased to the default rate, issuer must reduce it back to the original rate if cardholder makes six months of on-time payments. Union Plus cardholders already have this protection
Issuers may not raise rates during the first year after an account is opened Union Plus cardholders already have this protection
Promotional rates must last at least six months Union Plus cardholders already have this protection
No universal default (no increases in a cardholder's rate based on payments on unrelated accounts) Union Plus cardholders already have this protection

Notice for Changes in Account Terms

Credit CARD Act Provision Impact on Union Plus Credit Cardholders
45-day advance written notice of significant changes Union Plus cardholders already have this protection
Opt-out requirement Union Plus cardholders already have this protection
No change in terms for repaying balance if customer opts out Union Plus cardholders already have this protection

Fees

Credit CARD Act Provision Impact on Union Plus Credit Cardholders
Over limit fees eliminated unless the cardholder authorizes the account to go over limit Becomes effective February 22, 2010
Over limit fees (if authorized by the cardholder) may be charged only once per billing cycle Union Plus cardholders already have this protection
No extra fees for paying your bill except through a live representative on the due date Fees for payments made over the phone, by wire transfer, or on-line will be eliminated, except for
last minute payments by phone with a live customer service representative.
Penalty fees (e.g., late fees, over limit fees) must be “reasonable and proportional” Federal Reserve Board is expected to issue guidelines in February that will force banks to lower current fee levels; effective later in the year
Restrictions on “fee-harvester cards” with high fees, low limits targeted to subprime borrowers The Union Plus program never included these types of cards

Billing

Credit CARD Act Provision Impact on Union Plus Credit Cardholders
Payment due dates must be on the same date every month. Becomes effective February 22, 2010
Billing statements must be mailed at least 21 days before the due date Union Plus cardholders already have this protection
Payment deadline cut-offs no earlier than 5 pm Becomes effective February 22, 2010
Same day credit for payments received at local branches Becomes effective February 22, 2010
Payment applied to the highest-priced balance first instead of the lowest-priced balance Becomes effective February 22, 2010
No application of finance charges for previous billing cycles Union Plus cardholders already have this protection

Disclosures

Credit CARD Act Provision Impact on Union Plus Credit Cardholders
Statements disclosure: time and total interest to pay off the card balance with only minimum payments Statements will be revised to follow Federal Reserve Board guidelines by February 22, 2010
Statements disclosure: payment amount needed to pay the balance in 36 months Statements will be revised to follow Federal Reserve Board guidelines by February 22, 2010
Clear due date and late payment penalty on statements Statements will be revised to follow Federal Reserve Board guidelines by February 22, 2010
Credit card agreements posted online Online posting will follow Federal Reserve Board guidelines by February 22, 2010
Toll-free phone numbers for credit counseling and debt management services on statements Union members are already eligible for the Union Plus Credit Counseling program; new placement and frequency will follow Federal Reserve Board guidelines by February 22, 2010

Young Customers

Credit CARD Act Provision Impact on Union Plus Credit Cardholders
Restrictions for offers to consumers younger than 21 Union Plus offers credit card accounts only to individuals with an established credit history; there are no special student card accounts.
Restrictions on line increases for those younger than 21 Becomes effective February 22, 2010
No pre-screened offers those younger than 21 without their opting to get these offers Becomes effective February 22, 2010
Gifts to students Union Plus did not target students; does not apply

The remaining provisions (about Gift Cards and Credit Report Advertising) are not applicable to the Union Plus Credit Card Program.

Member Comments

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Most AFL-CIO and Change-to-Win unions participate in most Union Plus benefits, but some international unions elect not to offer all the programs. So in order to access all of the programs your union participates in, select your union from the drop down menu.

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But - if you are a Union Plus Credit Cardholder, you could be eligible for additional discounts.

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    1. What your national union’s name (not just your local number)? Scroll through the list we have to see if you recognize your union.
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    4. Is there a shop steward or work colleague you can ask what the name of your union is? You can even ask your human resources department to tell you the full name of your union?
    5. Do you have a Union Plus Credit Card? If so, the name and logo for your international union should appear on the front of the card.
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