Credit Card Law

Credit card debt law, including the new Credit Card Accountability Responsibility and Disclosure Act of 2009, gives you, the consumer, significant rights. The new Credit Card Law came into effect in February of 2010 and requires companies to actually mail bills at least 21 days prior to the due date of the bill.

Unless you are 60 days late in payments, the lender cannot raise the interest rate on existing balances on your card. Notice must be provided at least 90 days prior to a rate hike. Payments must also be applied to the highest rate balances first, not the lowest interest rate.

How to handle collectors?

You have the right and obligation to dispute a debt if it is invalid or that has been incorrectly calculated. The dispute must be done in writing and in a manner that allows you to prove receipt. Many times the amount of a debt is not clear. Interest rate changes are made unannounced, penalties assessed, etc. to the point that you cannot tell what the actual principal amount is that was owed and how much of the claim is interest. If the amount is not clear, it should be disputed. The collector then must obtain written confirmation.

A debt that is more than four years old since the last payment was made is probably time-barred in most jurisdictions. In other words, the statute of limitations has expired on that debt. You should check the time limit in the state where you live.

When you talk to a creditor on the phone, keep a log of who was on the line, when the conversation took place, and the substance of the discussion and any promises made. Follow the conversation with a letter summarizing what was discussed with a request that the letter be placed in your file.

If a creditor is abusive on the phone, politely end the call. Unless they are the original creditor, you have the right to notify the collector in writing to cease all communication with you at home, at work, on your cell phone, or at any other location.