The Credit CARD Act of 2009 & Economic Advocacy

The average American household had $8,329 in credit card debt at the end of 2008 (Source: Nilson Report, April 2009). In particular, young adults are quickly finding their income eaten up by debt payments. On average, young adults with credit card debt now spend nearly 24 percent of their income on debt payments (Source: "Generation Broke: Growth of Debt Among Young Americans"). Survivors of intimate partner violence may find themselves with credit card debt that they had little or no control over or that they were previously unaware of, while having limited means to make rising monthly payments. Working with survivors to address the impact of credit card debt is an important part of an economic advocates’ role in supporting women’s efforts towards financial freedom. Recent legislation changes have provided women with some additional tools with which to do this work. The Credit CARD Act of 2009 increases credit card consumer protections and outlines changes to monthly credit card statements. In particular, enhanced consumer disclosure requirements can use useful for advocates and survivors in their efforts to develop a credit card debt action plan. These requirements, all of which took effect on February 22, 2010, include:

• Credit card companies will be required to post all of their credit card contracts online at www.federalreserveconsumerhelp.gov where they can be easily referenced, even if a survivor does not have current access to her contract

• Credit card companies will be required to disclose penalty rates, grace period rules, and fee structures in easily understood language.

• Credit Card Billing Statements will now include the following:

o Interest charged by the type of transaction

o Year to date total of interest and fees charged

o Current APR

o What will happen in a survivor makes only minimum payments, including what the repayment time will be and the total amount of interest she will pay

o The monthly payment amount necessary to eliminate debt within 36 months

o A toll free number with consumer information and credit counseling

o A toll free number for questions about the billing statement

o A negative amortization warning-meaning the survivor is in a situation in which she would never get out of debt if she only makes the minimum required payment each month.

We hope these and other changes will benefit survivors of domestic violence in their efforts to gain financial freedom. Please share in the comments section if you have other thoughts or questions about how to use these regulation changes in economic advocacy.