Card Card Commercial Contest Credit Master

Admin | December 09, 2011 | Comments Off

Card Card Commercial Contest Credit Master

Card Card Commercial Contest Credit Master

“Economists like to call the banking system the heart of the economy,” states economist Joseph E. Stiglitz in his book Freefall: America, Free Markets, and the Sinking of the World Economy. This may certainly be the case as the Federal Reserve estimates that U.S. households hold approximately $827 billion in revolving credit, most of which is credit card debt. On August 22, 2010, the Credit Card Accountability Responsibility and Disclosure (CARD) Act of 2009 took effect, designed to inject consumer protection rules into a gift card and credit card system that was draining many cardholders of their functional values.

Regulatory Limits on Gift Card Fees and Expiration Dates

The Credit CARD Act of 2009 regulates bank credit and gift cards – many of which carry the Visa, MasterCard, or American Express imprints. One of the changes under the Act is that gift card issuers can only deduct point-of-sale purchase fees during the first 12 months of the gift card's life. Fees charged to consumers after the 12 month period must be clearly displayed on the card, along with a web address and telephone number for consumer questions.

Before the fee limiting Act, bank gift card companies were charging a variety of fees. Some card issuers were even assessing fees for customer service phone calls, according to L.A. Times business writer Kathy M. Kristoff. Jennifer Tramontana, a spokesman for the Network Branded Pre-paid Card Association, reports that transaction and inactivity use fees were ranging from $1 to $5. Under the new regulations, bank gift card issuers are banned from charging more than one fee in a given month. Also, bank gift cards cannot expire less than five years after issuance.