First Year Protection for Credit Cards

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Ever get a credit card that stated an extremely low interest rate, only to leave you feeling like you went to Vegas and lost a sure bet. Many cardholders have, after getting a new credit card and getting their interest rates raised within the first couple of months. Other cardholders feel the same way after a promotional period ends in what seems like a shorter timeline than what is stated on the application.

 

With the Card Accountability, Responsibility and Disclosure Act, this will be a thing of the past with cardholders. Under the new act credit card holders will have first year protection. I know; it sounds like the manufacturer’s warranty when buying a new refrigerator or washer/dryer, but for many cardholders this protection has been long awaited. With first year protection, contract terms must be spelled out plainly, and must last the entirety of the cardholder’s first year.

 

Also under first year protection, credit card issuers can still provide introductory or promotional rates with new card accounts or anytime during the length of the account. However, these introductory or promotional rates and periods must be clearly stated and last a minimum of 6 months.

 

In all, my opinion is that the first year protection is a good thing that should help many cardholders get what they are signing up for; at least on the interest rate side of things.

 

What are you thoughts on first year protection and introductory/promotional rates?