New Rules For Credit Cards and Gift Cards

The Credit Card Act of 2009 implemented new rules for credit cards and gift cards were rolled out in stages starting last summer and now several provisions are set to be effective on August 22, 2010. The final round of rules will benefit both credit card users and gift card users. The new rules state that your credit card late fee can’t exceed your minimum payment. If you minimum payment is $15 then your late fee can at the most be $15. The new rules will also do away with “inactivity” fees and will require credit card companies that increase your interest rate to re-evaluate that increase six months later.

Changes To Gift Cards
The new gift cards provision known as H.R. 5502, states that gift cards can’t expire before five years. This means if you load money onto a gift card the expiration date has to at least be five years from when you purchased the card. The act also requires gift cards to be replace upon customer request by the card issuer. Card issuers also have to provide these new disclosures along with any gift card purchases so consumers know their rights. These new rules have been created for the sole purpose of protecting consumers.

Currently gift cards typically have an expiration date of one year. If the card is not used within a year of purchase then the card is not valid. Lawmakers think this is unfair which is why they have elected to extend the expiration date out to five years. The new laws also protect consumers against balance draining fees. No fee can be charged to the card unless the card hasn’t been used for one year and even then there can only be one charge a month.

If this act is accepted then some 100 million gift cards would have to be destroyed and reissued. That’s a lot of plastic! According to Representative Dan Maffei who sponsors this legislation, this many gift cards is “equivalent to eight football fields filled 12 feet deep with plastic card.” The president has signed the act and it is set to go into place August 22, 2010. To see the official summary of H.R. 5502 you can visit the Library of Congress. There are 4 versions of Bill Number H.R.5502 for the 111th Congress.