10 Years After the Credit CARD Act, 8 in 10 Americans Still Want More to be Done
Thursday, February 14th, 2019
Ten years after a landmark federal law transformed the credit card industry, a large majority of Americans say they still want more to be done to protect consumers, according to a new report from CompareCards.com.
CompareCards surveyed more than 1,000 Americans to find out their views on the Credit Card Accountability, Responsibility and Disclosure Act of 2009 – better known as the Credit CARD Act – a decade after President Barack Obama signed it into law on May 22, 2009. The Act, among other things, limited banks' ability to increase interest rates on existing credit card balances, required people under 21 to have an adult co-signer or show proof of income to get a card, restricted banks' ability to charge overdraft fees, ramped up disclosure requirements and mandated that any payments above the minimum be applied to higher interest balances first.
With the 10th anniversary of the CARD Act approaching, CompareCards wanted to see what people thought of these changes. The survey found that nearly half of Americans had never heard of the CARD Act, but among those who had, nearly three times as many viewed it as a positive than those who saw it as a negative. The vast majority of Americans, even if they hadn't heard of the Act, want even more laws to protect consumers, including a limit on just how high credit card interest rates can go.
Seventy-nine percent of people agreed there should be more laws and/or regulations put in place to protect credit cardholders, while just 6 percent disagreed. Even 77 percent of Republicans agreed.
Eighty-eight percent said there should be a cap on the interest rates financial institutions can charge on a credit card. Those with the lowest incomes are least likely to support a cap, while those with the highest incomes are most likely to support.
Nearly half of Americans (47 percent) said they had never heard of the CARD Act when asked whether the Credit CARD Act of 2009 had a positive or negative effect on consumers. Of those who were aware of it, 40 percent said it had a positive effect, while just 15 percent said it was a negative and 45 percent said neither.
Seventy percent said someone under the age of 21 be required to show proof of income or have a co-signer to get a credit card – and the older you are, the more likely you are to agree.
Nearly 1 in 4 (24 percent) said if someone is 60 days late with a payment on one credit card, the issuers of that person's other credit cards should be able to raise the interest rates on those cards as the result of that late payment.
"The passage of the Credit CARD Act was an earthquake in the world of credit cards, but the vast majority of Americans say more still needs to be done," said Matt Schulz, Chief Industry Analyst for CompareCards. "What they want more than anything is a cap on just how high credit card interest rates can go. That's understandable, given that Americans have never owed more on their credit cards than they do today. With all that debt, any reduction in rates would be welcome news."
Schulz continued, "The recent government shutdown gave us a glimpse of how many Americans are teetering on the edge financially. They're just one or two missed paychecks or one medical emergency away from being in real financial trouble. Knowing that, your best move today is to commit to making 2019 the year that you focus on paying down any credit card debt you're carrying. The longer you put it off, the more expensive it'll be and the longer it'll take to pay down. That means that most cardholders can't afford to wait any longer."