A credit card is a plastic card that establishes that the person to whom it was issued may charge bills for which the person undertakes to pay at a later time, including interest, depending on when the payment is made. Credit card laws are laws that set out the responsibilities of consumers and the obligations of those who offer credit. Often, aspects of the legislation are explicitly created to protect consumers. Credit card laws may be separate legislation or included in legislation handling consumer credit as a whole. Legislation directed at credit practices is often national, but the European Union also has credit laws covering all member nations.
In New Zealand, the law that covers credit contracts between consumers and businesses is called the Credit Contracts and Consumer Finance Act 2003. Like similar laws in other places, the New Zealand law covers what consumers and creditors can, may, and must do in honoring the terms of their relationship. The law lays out the consumer’s rights prior to signing a credit contract and afterwards. It sets out what sellers and lenders must tell consumers, when they must tell them, and what must be specified in a contract. It also specifies how consumers can get help.
In Australia, the National Consumer Credit Protection Bill passed in October 2009, with reforms slated to be in place on 1 July 2010. An amendment called the National Consumer Credit Protection Amendment Act 2010 was passed in February 2010. With this legislation, the Australian Securities & Investments Commission (ASIC) becomes the agency responsible for overseeing the regulation of consumer credit throughout Australia, including credit cards. The new credit card laws require all those who wish to engage in specified credit activities to register with ASIC and then obtain an Australian credit license. The law also includes notice of responsible lending conduct, consumer remedies, and enforcement information.
In the United States, credit card laws are often separate from other legislation. A credit card law called the Credit Card Accountability, Responsibility, and Disclosure (CARD) Act was signed into law in May 2009 and went into effect in early 2010. Like other credit card laws in other countries, this law aims at consumer protection, among other goals.
Significant changes in the new US credit card legislation include requiring billing notifications at least 21 days prior to due date and requiring payments to be applied to the balance with the highest interest rates first. The new legislation also mandates the use of “plain language in plain sight” on all statements. Additionally, consumers must be informed of how long it will take them to pay off their balance if they pay only the minimum due.
