In 2009, President Barack Obama signed into law the Credit Card Accountability, Responsibility, and Disclosure Act, or Credit CARD Act. This law ended credit card industry practices in which interest rates could change at any time and in which hidden provisions enabled companies to charge significant fees without justification. The act also limited credit card marketing directed at college students and added consistency to store gift cards to ensure predictable fees and expiration dates. One year later, the Dodd-Frank Wall Street Reform and Consumer Protection Act greatly extended the Credit CARD Act’s reach by creating the Consumer Financial Protection Bureau, or CFPB, an independent federal agency that monitors banks’ practices in the interest of consumers.
These changes have created a clearer, fairer, and more competitive marketplace for consumers and have given them new tools to understand the terms of credit card offers and to pay off their debts responsibly. A recent analysis by four economists found that consumers have saved $12.6 billion in fees annually since the Credit CARD Act’s passage, based on a comparison of 160 million credit cards—including personal credit cards that were subject to the new rules, as well as small-business credit cards that were not.
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