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Monday, February 6th 2012

Credit CARD Act quiz

The Credit CARD Act of 2009 ushers in a new era for credit cards.

The law, signed by President Obama in May 2009, is being phased in over a yearlong period and covers a wide-ranging set of reforms meant to eliminate unfair and deceptive practices.

The most significant consumer protections began Feb. 22, 2010. That's when credit card companies could no longer increase interest rates on existing credit card balances at "any time, for any reason."

So test your knowledge of the new credit card law.

1. The Credit CARD Act regulates which of the following activities? (Check all that apply)

Grace periods.
Bank CEO salaries.
Debit card fees.
Checking account fees.
Legally carrying a gun on an airplane.

2. How much advance notice must be given to consumers when there are significant changes in credit card terms?

15 days.
30 days.
45 days.
None, all changes can take effect immediately.

3. True or false: The CARD Act prevents credit card companies from ever increasing interest rates on credit card accounts.

False.
True.

4. Which of the following is NOT a legal reason for increasing interest rates on existing credit card balances? (Click all that apply -- and remember, we want the answer or answers that are NOT legal reasons.)

When an introductory period ends and a zero percent teaser rate increases to the regular account purchase rate.
When the bank's profit margin on credit card accounts dips below 10 percent.
When the account has a variable rate.
When a cardholder is more than 60 days late paying a monthly credit card bill.
When a debt repayment or workout plan ends.
When a member of the military who has received a reduced interest rate ends his or her military service.

5. How far away from college and university campuses do credit card marketers have to be in order to offer freebies to students in exchange for signing up for credit cards?

One mile.
One block.
100 feet.
1,000 feet.

6. If you feel that your credit card issuer has violated the Credit CARD Act in any of its actions, you can:

Call the credit card company, yell obscenities and hang up.
Contact the federal or state agency that oversees the credit card issuer and file a complaint.
Call the credit card company, ask to speak to a supervisor and ask that person to explain the changes to your account.
None of the above. There's no recourse if the bank doesn't play by the rules.

7. True or false: If you attempt to make a purchase but don't have enough available credit on your card, a credit card company can, without asking, approve the transaction -- but then hit you with an over-limit fee.

True.
False.

8. When opting out of changes in terms on credit card accounts, consumers have which of the following options?

Shop around for another credit card offering better terms.
Transfer the balance to another credit card.
Get a personal loan to pay off the credit card debt in full.
Repay the balance at the old interest rate and close the account.
All of the above.

  
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