Credit Card Accountability and Responsibility Disclosure Act of 2009 (CARD Act) FAQs

 

I received a statement but my card has a zero balance.  Why did I receive this statement?
Although you would not ordinarily receive a statement, we were required to send this one to you in order to provide written notice of important upcoming changes to your account terms.

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I received a statement but I have previously requested to have my paper statements suppressed.  Why did I receive this statement?
Although you would not ordinarily receive a statement, we were required to send this one to you in order to provide written notice of important upcoming changes to your account terms.  Once all notices have been mailed, we will resume the suppression of your statements as originally requested. 

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Which terms of my credit card agreement are changing?
Your minimum required payment is increasing, and the fee assessed for late payments and returned payments will now be up to $35.00.

Currently your minimum required payment is 3% of your statement balance or $20.00, whichever is greater.  Effective November 5, 2010 your minimum required payment will be 3% of your statement balance or $35.00, whichever is greater.  If the statement balance is less than $35.00 the required minimum payment will be the statement balance.

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Why is my minimum required payment increasing to $35.00?
The credit union made these changes to comply with recent reforms in financial regulations.  Additionally, an increased minimum payment is beneficial to our members.  By paying this slightly higher payment amount, our members will pay their balances off much faster and incur less in interest charges over time. 

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My Change-in-Terms notice and my statement both indicate that the fee for late payments is “up to $35.00”.  Will the fee for late payments ever be less than $35.00?
Possibly.  The assessment of fees on credit cards is now regulated.  Depending on the minimum amount you owe and the history of previous late payments, the fee amount assessed to your card may fluctuate but it will not be greater than $35.00 as of November 5, 2010.

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My Change-in-Terms notice indicates that the fee for returned payments is “up to $35.00”.  Will this fee be charged to my credit card?
Yes.  Instead of charging your deposit accounts for returned checks and Automated Clearing House (ACH) payments, fees will be applied directly to your credit card account for returned credit card payments.  Depending on the minimum amount you owe and the history of previous returned payments, the fee amount assessed to your card may fluctuate but it will not be greater than $35.00.

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My statement lists two separate interest charges for purchases.  Have I been charged twice?
No, you have not been charged twice.  You recently received a statement that included a Change-in-Terms notice.  The notice indicated that transactions made on or after a certain date would be calculated at a new Annual Percentage Rate (APR).  Purchases calculated at your old APR will continue to be listed separately on your statement from purchases calculated at your new APR. 

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My statement lists two separate interest charges for cash.  Have I been charged twice?
No, you have not been charged twice.  You recently received a statement that included a Change-in-Terms notice.  The notice indicated that transactions made on or after a certain date would be calculated at a new Annual Percentage Rate (APR).  Cash advances calculated at your old APR will continue to be listed on your statement separately from cash advances calculated at your new APR.

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Can I still be charged Finance Charges?
Yes.  Finance charges will still be assessed to your account if you make a cash advance, or if you do not pay your entire statement balance in full each billing cycle. 

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 How will these new rules affect my interest rate?
NWFCU will not increase your interest rate without your knowledge.

Unless you have a non-variable FirstCard Visa® Platinum, the Visa® or MasterCard® credit card you carry with us is a variable rate card.  Because the index of Prime is factored into your rate calculation, Annual Percentage Rates (APRs) are subject to go up without notice if Prime increases.  Should NWFCU raise the rate on your card for any reason other than a change to Prime, you will be given written notice of the change in advance and the rate change will only apply to future transactions.  The interest rate on your existing balance cannot go up unless Prime increases.

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Can the terms of my credit card change?
Yes.  However, NWFCU will notify you of any significant changes to your terms, in writing, 45 days in advance. 

The only exception to this rule is if your credit card account has been opened for less than one year.  In such cases, financial institutions are not permitted to change the terms until the card account reaches its one year anniversary.  (Please note that increases to Prime are not considered to be changes in terms, therefore, an increase to Prime will yield a higher APR to your card even if it is less than one year old.)

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I received a Change-in-Terms notice on my statement but my actual APR isn’t changing.  Why did I receive this notice?
Although your APR may not be directly affected by our Change-in-Terms, we were required to send notice to you to ensure our compliance with the new laws.

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How do these new rules affect when I receive my statement and when my payment is due?
Your statement will be mailed to you no later than 21 days before payment is due.  The law requires the due date to be the same calendar day of the month, every month.  If your due date happens to fall on a non-business day, any payments we receive from you the very next business day cannot be counted as late.

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How will my payments be applied?
When you make a payment that exceeds the minimum amount due, the amount in excess will first be applied to the balance with the highest APR.  Any remaining amount will be applied to the balances in descending order of APR.  This method is referred to as the “High to Low Method”.

In addition, finance charges, international transaction fees and late fees will be paid first, preventing any practice of charging interest on interest.

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Why does my statement look so different?
The changes to your statement were required by the Credit CARD Act and were designed to help make your statements clearer and easier to understand.  Click here for more information about the changes you may be noticing.

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 Can I be charged an over-the-limit fee?
The law requires consumers to opt in for overlimit fees before issuers can assess them.  As a result, NWFCU no longer charges over-the-limit fees.  Please be aware that your card will go over its limit if you exceed the available credit and it may also be reported to the credit bureaus as overlimit.  The latest regulatory requirement only pertains to the assessment of a fee.

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Can I still get late fees?
Yes.  If you fail to make a payment for the minimum amount due on or before the effective due date, you may be charged a late fee.  Please refer to our Schedule of Fees, and the late fee warning printed on your monthly statement for the most current fee amounts. 

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Where can I turn to for additional information regarding the new credit card rules?
Click here to access the Federal Reserve Board’s interactive tools and features designed to help consumers understand the changes put forth by the Credit CARD Act.

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