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.
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