Fast Fact

According to the Federal Reserve, consumer use of credit cards peaked in 2008, with over $975 billion dollars in revolving credit outstanding. That number has since dropped to less than $830 billion outstanding.

Background

Credit cards are unique financial tools that allow people and small businesses to borrow small amounts of money without any collateral. Now that the provisions of the Credit Card Accountability, Responsibility, and Disclosure Act of 2009 have been implemented, customers will benefit from greater control, stronger protections, clearer rules and improved predictability when using their credit cards.

Issuers are changing quickly to adjust to these important new rules while continuing to lend to creditworthy consumers in a very challenging economic environment. This is a balancing act but issuers are committed to providing credit to the many individuals and small businesses that need it grow and prosper.

In today's economy there is no doubt: credit cards play a very important role.

Myth vs. Fact

Myth: Customers must accept interest rate changes by card issuers.

Fact: The CARD Act made it a priority to protect customers from interest rate increases. If customers are unhappy with their interest rates or the terms and conditions attached to their credit cards, there are thousands of competing issuers that could accept their business. More importantly, the CARD Act prohibits interest rate increases on existing balances, except in limited circumstances.

A Pocket Guide to the Credit Card Industry

This 2007 guide offers a brief history of the credit card industry prior to the 2009 CARD Act. Pocket Guide (pdf)

College Students & Credit Cards

The CARD Act contains various provisions that specifically affect college students and young adults. Click here to learn more.

Get Smart About Credit is a national financial education program that helps bankers teach young adults the ABCs of wise credit use. Learn more at www.GetSmartAboutCredit.com.