Credit Card Changes – Your Guide to the CARD Act
On May 22, 2009, President Obama signed the Credit Card Accountability, Responsibility, and Disclosure Act, or the Credit CARD Act, into law. The CARD Act expands existing Truth in Lending guidelines to help make sure that the terms on every credit card are fair and clear.
These new laws go into effect on different dates between August 2009 and February 2010. We will send you a notice before any important changes take place.
Additional information about the CARD Act can be found at the links below.
Get a better understanding of how your bill is calculated and how your payments are applied.
Payment allocation is how we apply your payment to your balance when you have more than one interest rate e.g. you take advantage of a promotional rate for a balance transfer.
New law: Any amount you pay over the minimum payment must be applied to your highest rate balances first.
What changes for you? If you pay more than the minimum payment, we will pay down your higher-rate balances first … which means you will pay less interest over time.
Double-cycle billing is the way some other credit card companies calculate the monthly interest charged on an account. It uses the average daily balance for a two-month period, which sometimes means higher interest charges for you.
New law: Double-cycle billing will be banned.
What changes for you? Absolutely nothing. We have never used double-cycle billing.
Look for all of your credit card statements to give you more information about your account—and for that new information to be even more helpful.
Your Kinecta statement already includes many helpful sections and details:
- Clear call-outs of the most important information to you. Like your transactions, fees, minimum payment and due date.
- Consumer-friendly explanations so you will know exactly how your balance was calculated.
- Clear summary of your Dream Points® rewards earned per cycle.
You will find that the new information in your statement will make it even easier for you to understand your account and make decisions about it. You can look for:
- The estimated time it will take you to pay off your balance by making only the minimum monthly payment.
- The amount you would need to pay monthly to pay off your balance in 36 months.
- Clear late payment warnings.
- Summary of year-to-date fees and the interest you have paid.
Predictable due dates
New law: Your credit card bill must be due on the same day of the month, every month.
What changes for you? To help you plan ahead, we will now make sure that your statement is due on the same day every month.
New law: Statements must be mailed 21 days before monthly payments are due.
What changes for you? Nothing. You will still receive your statement just as you do now—you may even get it a few days earlier.
You will now have more flexibility and choice when it comes to managing your credit limit.
New law: In the future, you may not be allowed to go over your credit limit unless you agree in advance to this service. As in the past, there will still be a overlimit fee.
What changes for you? If you want to Opt-In to retain the flexibility to go over your limit, you will have to give us permission in advance. If your Kinecta card has no preset spending limit such as the Visa Signature® Rewards® card, it will stay that way.
Interest rate changes
The CARD Act calls for more protection against changes to your interest rate.
New law: Credit Card companies cannot raise interest rates on existing balances or accounts that have been open for less than a year, except when:
- An introductory or promotional rate ends on a set date.
- Promotional rates must last for at least 6 months.
- You have a variable rate.
- You are more than 60 days late in making a payment.
What changes for you? We will be making these changes to our policies and procedures to comply.
Notice of changes
You will continue to be notified in advance if details change on your Kinecta card.
New law: You must be notified, in writing, at least 45 days before a significant change is made to your account—and a reason for the change must be provided. You can decline these types of changes and close your account by contacting your credit card company.
What changes for you? Nothing. You can continue to count on our policy to notify you of changes to your account at least 45 days in advance. We will continue to keep you informed about any changes to your account in a clear and timely manner.
New rules designed to help college students, young adults and their families make smart financial choices.
Marketing on college campuses
New law: Credit card companies will no longer be able to give college students free giveaways as part of their campus marketing.
What changes for you? Nothing. At Kinecta, we do not market credit cards on college campuses.
Ability to repay
New law: All credit card applicants under 21 must provide additional proof of their ability to repay what they borrow before they can be approved for a credit card.
What changes for you? If you are under 21 and already have a Kinecta card, nothing. New applicants under 21 are required to have a co-signer, or show proof of income when applying for a card.