Did the CARD Act Make Consumers Happier?

Did the CARD Act Make Consumers Happier?

by Jason Collazo

Believe it or not, recent showings on J.D. Power are saying “yes, yes it did.” The government’s CARD act was passed in 2009 and revolutionized the credit card industry as Americans had grown to know it. 

Although there has been some controversy surrounding the policy, mostly loudly by the card companies themselves, overall Americans seem content with it and the changes it enforced. Changes such as making it increasingly more difficult for lenders to charge fees and raise interest rates for any reason whatsoever and at any time. 

Also required was the clarification of lenders’ disclosures. Thus, U.S. credit card consumers are the happiest they have been since 2008, so says the annual J.D. Power and Associates report, which came out last Thursday morning (Aug. 18). 

Overall, on J.D. Power’s 1000-point scale, the rating rose to 731 from 714 in 2010.

"The transparency created by the legislation helped," said Michael Beird who is the sitting director of banking services at J.D. Power and Associates. “…the new layout and design of people's statements were generally well-received.”

2009 was a bad year for credit card companies and their consumers, as ratings sat as low as 705. That was due to the financial crisis then which rocked Americans and their spending habits. It was in May, then, that President Obama signed into effect the CARD Act, which stands for “Credit Card Accountability, Responsibility and Disclosure.” The credit card industry itself was no fan of the legislation.

The last compliance required on behalf of the act was done in August of 2010. The credit card industry suffered major financial losses due to the CARD Act, reportedly losing some $11 billion in revenue.

Despite that, though, credit card industries seem to be gaining in the long run, thanks to the government’s interference. More customers, according to the survey, understand the terms of their agreements than a year ago, due to increased educational efforts done by the companies. 

The J.D. Powers survey scores credit card lenders according to these six factors: interaction with their customers; credit card terms; billing and payment processes; rewards; benefits and services; and problem resolution.

So, did the CARD act make the American consumer a happier person? In some senses, it appears so! At least, with their credit cards, they seem to be.

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