Senior Center Hosts Know Your Credit Card Laws

Fairfax County and Mount Vernon Seniors and Law Enforcement Together hosted an about new credit card rules at the Hollin Hall Senior Center yesterday. Vee Johnson from the Department of Cable and Consumer Services presented information, handed out literature and answered questions from seniors.

"By knowing what these new credit card rules do for us, when credit card companies try to do something they shouldn't, you can go 'ah ah' and show them you know your rights," Johnson said. "Once we're informed consumers, we can easily navigate and get the best value. Credit is a usful tool, but you have to use it wisely to not get into debt."

The Credit Card Accountability Responsibility and Disclosure (CARD) Act was passed in 2009 and has been implemented since February 2011. The laws focus on controlling interest rates, reducing fees, allowing opt-in for overdraft protection and standardized billing cycles and statements.

"They're going to make their money on your balance, but if you are offered an increased interest rate you can refuse the change," Johnson said. "They have to honor your old rate on your balance, but you're basically you're not going to use the card again because any new purchase would be at the new rate."

Johnson suggested consumers close any cards that implement rates or fee's they disapprove of, but warned citizens not to leave themselves with no credit. Johnson also explained why consumers with impeccable credit can have their credit limits cut for, seemingly, no reason.

"If you have an area with a lot of foreclosures, they look at the zip codes and make a blanket decision to reduce everybody's credit limits.," Johns said. "There is nothing stopping you from calling the company or bank to try and negotiate your limit. They don't have to listen to you unless the reduction would trigger an 'over the limit' situation."

The CARD Act has negatively affected credit card companies profit margins, because the companies now have limits on the number and amount of fees that can be charged, Johnson said.  While the legislation doesn't stop companies from charging an overdraft fee, consumers can choose to opt-in to the program or risk having their card declined if they attempt to go over your limit.

"You have to let credit card companies know if you do or do not want overdraft protection," Johnson said. "If someone understands that you know your rights, they'll back off. If they act like they don't know what this 'CARD Act' you're talking about is, that's when you file a complaint."

For more information about the CARD Act, visit the Department of Cable and Consumer Services website.