August 06, 2010
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News: Fed Rolls Out Final CARD Act Rules
Previous provisions of the Credit Card Accountability, Responsibility and Disclosure Act of 2009 (CARD Act) have given a great deal of attention to protecting the credit cardholder. The final provisions which are due to become fully enforced give added protection to the gift cards and stored value cards or prepaid credit cards. These rules prohibit certain fees such as inactivity fees until the gift card is inactive for at least 12 months. The new rules that will roll out on August 22nd prohibits credit card companies from expiring any gift card or prepaid card for a minimum of five years. This five year period begins either on the date the card was issued or the last date funds were loaded onto the card.
According to the new rules, the expiration date, fees and a toll-free number to get information must be written on the card itself. There's one catch; there are nearly 100 million cards already printed in stock. According to the Fed, any gift certificate, store gift card, or general-use cards that were produced before April 1, 2010, has an extended deadline to January 31, 2010. It does not mean that the new rules are delayed until January it means credit card companies may use up their stocked cards until the extended date of January 31st. However, any new card produced on or after Aug. 22, must bear all the disclosures. Any card produced between April 1 and Aug. 22 cannot be sold. However, all consumer protection provisions will be implemented on August 22nd. This measure will save credit card companies the cost of destroying cards that have already been produced.
The new CARD Act contains some of the most sweeping changes in the credit card industry in decades. These universal policies will be instituted to end the unfair marketing tactics of hidden fees that have intentionally clouded financial terms and resulted in sending millions of Americans further into debt. Read our series "Managing Under New Credit Card Rules"” to learn more about these new rules.