Survey Shows Consumers Benefited from CARD Act

Survey Shows Consumers Benefited from CARD Act

March 27, 2013         Written By Justin Hefner

A survey by Consumer Action has found that while consumers still gripe about credit card companies, the number of complaints has fallen significantly since the implementation of the Credit Card Responsibility, Accountability and Disclosure Act.

Prior to the 2009 law going into effect, credit card problems topped the nonprofit agency’s complaint hotline. Since then, credit card complaints have plunged from 12 percent in 2009 to 4 percent in 2010.

“Credit card complaints don’t even make an appearance any more in our Top Ten list of consumer complaints,” said Linda Sherry, Consumer Action’s director of national priorities, in a statement. “The CARD Act banned the biggest and most blatantly unfair ‘gotchas’ like retroactive interest rate hikes and repeated and exorbitant penalty fees.”

The findings come from a Consumer Action online survey of cardholders to learn what impact the CARD Act has had on credit card users. Overall, respondents reported that credit card companies are treating them the same or better than before the law. They also said the disclosures mandated by the law have helped them take action to avoid credit card debt.

Minimum payment warning

Nearly half (45 percent) of consumers surveyed said that they pay more every month because of the minimum payment warning on their monthly statements, while 26 percent said the warning has had no impact on their payment behavior. The CARD Act’s required minimum payment warning on credit card statements alerts consumers as to how much it will cost and how long it will take to pay off the balance when they choose to pay only the minimum payment.

Customer service and corrections

A quarter (26 percent) of respondents said that customer service and phone communications had improved since the law took effect. Nearly 60 percent believed that service had stayed the same, and 15 percent thought it had gotten worse.

About 15 percent of consumers reported that card issuers have treated them more fairly since the law’s implementation. Three-quarters (75 percent) felt they were treated the same as before the law, and 9 percent said they’ve been treated less fairly.

Interest rate increases

The biggest gripe about the CARD Act in the immediate aftermath of its implementation was the number of card companies that hiked customer interest rates in advance of the new law.

About a quarter (23 percent) of consumers surveyed reported that interest rates on their card had risen in 2011 or 2012. About half of the consumers who said their rates rose, most frequently responded that they did not know (or were not given a reason) why the rate increased. Other reasons provided for rate increases were disputes over a payment, ID theft repercussions, increased costs and infrequent card use. In open-ended responses, some cardholders complained of unexpected credit line decreases and account closures.

Qualifying for credit

In the wake of the new law, it has been tougher for many to qualify for credit cards.  While more than half (53 percent) of respondents who had applied for credit in 2011 or 2012 told Consumer Action that they received a new card, 37 percent said it is harder to qualify for credit.

Unfair and deceptive acts or practices

While credit card complaints to Consumer Action’s hotline have fallen sharply, cardholders continue to complain of what they deem unfair or deceptive practices by card issuers.

Survey participants complained that some issuers unexpectedly closed their accounts even when they paid on time and paid more than the minimum required, and that the closures damaged their credit scores. Long-term customers who went through financially difficult periods said issuers were unwilling to reduce rates when asked.

Other consumers highlighted unfair cardholder agreements: The “last line of the contract still says they can change anything for any reason anytime–that is not a contract.”


The information contained within this article was accurate as of March 27, 2013. For up-to-date
information on any of the terms, cards or offers mentioned above, visit the issuer's website.


About Justin Hefner

Justin Hefner is in the education field and has written about a number of financial issues. He holds a Bachelor of Arts degree from Texas Tech University and a Masters in Education from Texas State University.
View all posts by Justin Hefner
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