Do Interest Free Credit Card Transfers Hide Loopholes?

There should not be a situation where an interest free credit card transfer of an existing credit card balance should have a hidden condition or loophole that affects the card holder. This is because of changes made to the laws covering credit cards that require certain disclosures be made to card holders in order for them to properly judge and manage their credit. Any loopholes that are written in the contract must be explained to the card holder in order for them to make a better informed decision.

What Is a Loophole?

Loopholes are exceptions to stated rules, practices and procedures and provide a one-sided benefit to the disadvantage of the consumer. Loopholes appear in all types of agreements and other legal documents and are based on the company’s understanding of the law and how they may be manipulated.

CARD Act of 2009

The Credit Card Accountability Responsibility and Disclosure Act of 2009 (Credit CARD Act of 2009) was signed into law on May 22, 2009. The purpose of the law is to prevent abusive practices by credit card issuers against card holders. There was a situation occurring where card holders were promised certain benefits and privileges and were reneged on due to some vague or obscure language in the credit card agreement.

The CARD Act, which goes in effect in February 2010, requires credit card issues to disclose any interest rate hikes within 45 days to the card holder and eliminating penalties against card holders who pay their bills on time. It reduces excessive fees and addresses misleading terms and contracts by requiring more clear and concise disclosures.

The Effects of Balance Transfers

When a credit card customer transfers a balance to a new one, they establish a new relationship with the credit card issue. It is also during this period that the transferee can be viewed as highly vulnerable to arbitrary changes in the interest rates promised benefits and other abusive prior practices that the CARD Act seeks to change and eliminate.

Interest free credit card balance transfers have no more or less loopholes written in the credit card agreement than other types of credit card agreements. The new law seeks to eliminate or close the gap on some of these loopholes. Ultimately, it is the responsibility of the consumer to read carefully and understand the terms of any agreement that they sign in order to avoid abusive offers and not fall victim to a credit card issuers loopholes.

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