Credit CARD Act: Credit Card Accountability Responsibility and Disclosure Act of 2009

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In a Nutshell

The Credit CARD Act of 2009 is a federal law that gives consumers certain protections against unfair practices related to credit cards.
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The Credit CARD Act of 2009 changed the rules for credit card companies, giving consumers more protections. But you may not know exactly how it can help you.

The Credit CARD Act of 2009 is officially called the Credit Card Accountability Responsibility and Disclosure Act of 2009, but it’s also sometimes referred to as just the CARD Act. Congress first passed the bill, which had support from both the U.S. Senate and House of Representatives, on May 22, 2009.

The CARD Act amended the Truth in Lending Act with a goal “to establish fair and transparent practices relating to the extension of credit under open end consumer credit plan, and for other purposes.” This law directly affects you if you have a credit card or have had one recently.

Why the Credit CARD Act of 2009 is important

The Credit CARD Act of 2009 is more important than many people may realize. The Consumer Financial Protection Bureau, or CFPB, released a report in 2015 detailing the law’s impact since going into effect. The CFPB found that consumers saved more than $7 billion in late fees and avoided more than $9 billion in over-limit fees from 2011 through 2014 alone.

In addition to saving consumers billions of dollars, the Credit CARD Act of 2009 helped by taking aim at confusing and harmful billing and business practices. The law restricted how and when creditors can raise the interest rates and fees on your credit cards. It regulated billing practices, standardized disclosures for consumers and limited how credit card companies can interact with young consumers.

What consumers need to know about their protections under the Credit CARD Act of 2009

Here are some of the biggest changes the Credit CARD Act of 2009 made and how they protect you.

Annual percentage rates

The CARD Act changed the rules around how and when creditors can change your annual percentage rate, or APR. For example, credit card issuers must notify you no later than 45 days prior to the effective date of APR increases or any other significant changes to the cardholder agreement.

Card companies also can’t just change your APR on a whim — this is especially restricted during the first year after an account is opened. They can do it only under certain circumstances. Here are a few examples.

  • If a promotional period expires that was clearly and conspicuously disclosed to the consumer before it started. You might see this with an introductory balance transfer or purchase APR.
  • You have a variable APR and there’s a change in an underlying interest rate index tied to your APR, like the prime rate.
  • If you don’t make your required payment within the 60 days after your due date.

And, if your APR does go up for one of those reasons, the CARD Act requires creditors to consider reducing your APR in the future if those factors change. For example, if your rate is increased because you were more than 60 days late, you can get your old rate reinstated if you make the minimum payment on time for six consecutive months after the increase.


The Credit CARD Act restricted the fees that credit issuers can charge you. For example, card companies can’t charge you over-limit fees unless you opt into a program allowing charges that go over your limit. If you choose not to participate, a transaction that would go over your card’s limit should be declined — but you also shouldn’t be charged any additional over-the-limit fees. Also, if you pay late, credit card companies are allowed to charge you only “reasonable and proportional” late fees. That may not sound like much, but by 2014 it had helped reduce the average late fee charge by 20%, according to the CFPB.

You may be surprised to know that the CARD Act also regulates gift cards. Did you know that card companies can charge what’s called a dormancy fee if your gift card or general prepaid card is inactive or drops below a certain available balance? Thanks to the CARD Act, card issuers can now do this only if you haven’t used the gift card within the last 12 months, and they can only charge you once a month as long as they conspicuously disclose the dormancy fee. Gift cards are also required to last at least five years before expiring, to give you a fair shot at using the cash first.


The Credit CARD Act expanded the mandatory minimum payment disclosures creditors must give to consumers. For example, on top of telling you what your minimum payment is, the credit card company has to tell you how long it would take in months to pay off your balance if you were to stop spending and only make the minimum payments.

The CARD Act also requires a card company to disclose whether it’ll raise your APR if you pay late, and, if so, how much the penalty APR will be.


The Credit CARD Act also has a lot of rules about how card companies can go about asking for and processing your payments.

Credit card issuers must apply any payment above the minimum payment amount to the balance bearing the highest rate of interest first. That means if you’ve got multiple balances on one card (a cash advance and a regular purchase, for example), any payment above the minimum will go to whichever balance has the higher APR. This can help you pay down that high-interest debt more quickly.

Card companies also aren’t allowed to mess with your due date. Payment due dates have to be the same date each month or the next business day if that date falls on a weekend or holiday. Statements must also be mailed no later than 21 days before the payment is due. And if your credit card offers a grace period, a steady due date is important.

Protecting young consumers

Young consumers with little experience with personal finance can be more vulnerable to predatory tactics. The Credit CARD Act seeks to protect young people by imposing limits on how card companies can interact with them.

If the card applicant is under 21, issuers can’t open the account or raise credit limits without taking into account the applicant’s independent ability to pay, unless they have a co-signer. If the applicant is 21 or older, the ability to pay doesn’t need to be independent — and can take into account funds that the applicant reasonably would have access to.

Card companies can also no longer offer students a tangible benefit (like a T-shirt or Frisbee) for applying for a card on or near campus at a higher-education institution or at an event sponsored by or related to an educational institution — unless it’s also offered to anyone who wants it, whether they apply or not.

What to do if rules aren’t being followed

If you feel the rules of the Credit CARD Act of 2009 aren’t being followed by your card issuer, you have a couple of options. First, you can contact your issuer to ask that the issue be resolved. It may turn out that the issuer is actually following the laws or made a mistake and will correct the issue on its own.

That might be the quickest way to attempt to get things fixed if the issuer is willing and able to make things right. If that doesn’t work, you can file a complaint with the CFPB here. And you might want to take both actions, just to cover all bases. After receiving a complaint, the CFPB will forward the issue to the company and work to get you a response within approximately 15 days in many cases.

Bottom line

The Credit CARD Act of 2009 imposed certain restrictions on how credit card issuers operate — the goal being to protect consumers against unfair fees and interest. The CARD Act has helped save consumers money, but credit cards of course can still be risky if you don’t keep your balances under control. Check out these five helpful tips for successfully managing your credit cards.

About the author: Lance Cothern is a freelance writer specializing in personal finance. His work has appeared on Business Insider, USA and his website, Lance holds a Bachelor of Business Administration in … Read more.