On Friday May 22, 2009 President Obama signed The Credit Card Accountability Responsibility and Disclosure (CARD) Act into law. Though in a way the banks shot themselves in foot through sheer greed and unfair (read abusive) business practices, we consumers can’t help but celebrate. We had won a battle against “special interests”.

Well, special interests did get something out of it after all, as the new law will not go into effect until February 2010. This law should have taken effect immediately. The banks and credit card companies are doing it (abusive practices) now! Why give them more time to continue trampling it over us?

Though there have been complaints in some quarters that the bill does not protect small business (only personal credit cards), it is a good start.

In a way, the banks helped us out and shot themselves in the foot. How? They took our money through economic bail-outs and then went ahead to hike interest rates at their own whims and their terms. We saved them from themselves and now we had to pay them so they could please Wall Street. Talk of an oxymoron.

Some of the unfair bank and credit card companies’ tactics included;

- Universal default: where your credit card issuer can hike your interest rate (sometimes to unreasonably high levels) simply because you were late for another unrelated payment.

- Lowering your limit, therefore hurting your credit score, and hiking your interest rates so as to “maintain profitability” (huh?).

- Now here’s a really ridiculous one. Some banks would hike your rates based on where you used your credit card. If you used your credit card at a place where several people giving the banks trouble had used theirs, you could be penalized (am I my brother’s keeper?).

I won’t go into the details of the bill as this has been covered extensively elsewhere in the media. But basically you will have more time to pay your bill, terms and interest rates will not go up on a whim, and they won’t be able to change terms retroactively, among other provisions.

Some say the provisions are not enough (and I agree). Spokespersons for the banks say that this will make credit tougher to get. But look at where “easy” credit got us. A curb on corporate greed, which is the major cause of the present economic mess, is a welcome thing in my opinion and ordinary thinking.

Related posts:

1. New Credit Card Laws: Good But Not Good Enough
2. New Credit Card Law – Banks Can Still Bite You in the Rear
3. Credit Card Companies – Crackdown on the Way