What is a key provision of the Credit Card Act of 2009?

The Credit Card Act of 2009 introduced several important changes aimed at protecting consumers from unfair practices in the credit card industry. One of the key provisions is the prohibition of retroactive interest rate increases. This means that credit card companies cannot arbitrarily raise the interest rates on existing balances without a valid reason, such as a payment being more than 60 days late. Previously, companies could increase rates on previously accrued debt, leaving consumers vulnerable to unexpected financial burdens.

This consumer protection measure helps to ensure that cardholders are not penalized for circumstances that might lead to a temporary inability to make payments, thereby promoting fairer treatment in how interest rates are applied.