Credit CARD Act of 2005

The Credit Card Accountability Responsibility and Disclosure Act of 2005 (S. 499) proposes several new consumer protections to regulate how credit card companies manage accounts and communicate with customers. If passed, the bill would require lenders to provide advance notice before increasing interest rates and would grant cardholders the right to cancel their accounts to avoid those increases.

The legislation also aims to eliminate certain common fees and penalties, such as charges for paying a balance in full or on time, and would require clearer disclosures regarding "teaser" interest rates and how long it will take to pay off a balance. Additionally, the bill introduces stricter requirements for issuing credit cards to minors and provides legal relief in bankruptcy for consumers charged interest rates that exceed the federal prime rate by more than 20 percent.