The CARD act of 2009 imposed many new rules for credit card companies. These rules imposed by the act were designed to force the credit card companies to ensure that cardholders are informed of their rights, aware of charges and able to easily make choices and changes to their accounts.  With these changes came a friendly new credit card statement equip with all necessary information that will now be readily available to the cardholder.

One of the common problems for cardholders prior to the card act was the difficulty reading and understanding the credit card statement.  The pages of small print and legal terms that filled the pages of most statements were virtually useless to most cardholders because they were not useful or even understandable to the average cardholder.

The friendly face of the new statement is designed to make the credit card statement more helpful, informative and usable for the cardholder.  The new statement forces card issuers to provide pertinent card information on the statement and eliminate the unnecessary information that bogged down the statement and confused cardholders.

The more user friendly statements include the following changes:

• It is designed to put important information at your fingertips, rather than tucked into multiple pages with small lettering.

• Contains the necessary account information that allows consumer to know what they owe, what they are being charged to borrow, the consequences of making late payments and the potential changes to their account.

• Written in user friendly, understandable language to ensure readability.

• Lists out the information that a consumer will need to make an informed financial choice.

Effective July 1st of 2010 the new credit card statement. This new, user friendly statement is the next step of a series of rules that will result from the CARD act. The new statement is designed to do the following:

Contains Important Information for Account Holder

• The account summary information will include the credit limit, amount spend on purchases, transfers, cash advances and interest charges and fees associated with the card.

• The payment information section will include basic payment information such as the minimum payment, the due date and the outstanding balance.

• Transaction charges may differ depending on what you are using the card for. Cash advances, balance transfers and purchases all carry different charges that are automatically applied to your monthly balance. The charges now have to detail the transaction you have made and the cost associated with this transaction during each statement month.
Inform cardholders of the late payment consequences.

• The late payment warning will explain the fees and charges associated with paying the minimum payment after the due date.  It will also explain the changes that may occur to the APR and promotional balance should a payment be late.

• A time line of the minimum payment schedule will be included on the statement. This information will list out the time it will take for you to pay off your outstanding balance and the charges you would incur if you paid only the minimum payment each month.  The minimum payment warning also lists out how much you would be paying if you chose to pay off the outstanding balance in 3 years.

Inform You of Account Changes

• Changes to card holder’s accounts will require written notice that will be listed on the statement.  These changes may include interest rates, term changes or account changes.  This section will highlight all of the changes that have taken place in that billing cycle and the fees associated with each.

• Information about interest rates and changes to these has to be listed clearly on the statement.  As a provision of the CARD act cardholders must provide at least 45 days advance notice to interest rate charges other than those triggered by late payments.

• Interest charge calculations provide a clear summary of the various types of rates that can be applied to different credit card transactions such as transfers, cash advances and purchase.

These are just a highlight of some of the changes that have been made to the credit card statement since July 1st.  The goal of the CARD act was to set perimeters as well as encourage cardholders to be more informed by giving them the information to make good financial choices.

This new statement is still hot off the press and not enough time has yet passed to see the effect that this new statement may have on cardholders. Cardholders should pay close attention to their statement in the early months to ensure that all necessary information is included on their new user friendly credit card statement.

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Tags: Card, Credit Card