Credit Cards Blog

Finance Blogs » Credit Cards » Does CARD Act help credit report?

Does CARD Act help credit report?

By Leslie McFadden · Bankrate.com
Wednesday, September 15, 2010
Posted: 2 pm ET

Today I wanted to address a reader's question about the Credit CARD Act, which is short for the Credit Card Accountability, Responsibility and Disclosure Act of 2009. It isn't often that I get to give a black-and white answer to a question, but this time I can.

"Credit savy" writes:  "I have heard that with the Credit CARD Act that creditors cannot report you 30 days late to the credit bureaus, but that they have to wait tell you are 60 days late. Is this true, and where can I find more info on this. Please clearify!!!!"

The CARD Act dictates that issuers cannot impose a rate increase on an existing balance due to late payment until 60 days have passed without payment. Issuers can raise rates on future charges with 45 days notice, once the account has been open for a year.

This limitation has to do with rate increases, not the reporting of delinquencies to the credit-reporting agencies. A 30-day delinquency can still harm your credit score if the creditor reports it, even if the missed payment isn't reflected in your interest rate.

The law also doesn't prevent your issuer from charging a late fee, though it would be subject to new restrictions on credit card penalty fees.

Have another question about credit cards? Fill out this form and select "credit cards" as the subject.

Follow me on Twitter.

«
»
Bankrate wants to hear from you and encourages comments. We ask that you stay on topic, respect other people's opinions, and avoid profanity, offensive statements, and illegal content. Please keep in mind that we reserve the right to (but are not obligated to) edit or delete your comments. Please avoid posting private or confidential information, and also keep in mind that anything you post may be disclosed, published, transmitted or reused.

By submitting a post, you agree to be bound by Bankrate's terms of use. Please refer to Bankrate's privacy policy for more information regarding Bankrate's privacy practices.