Many unfair credit card practices once commonplace are illegal as of Monday, February 22, when key provisions of a federal credit card law passed last year took effect. Attorney General Richard Cordray is urging Ohioans to be aware of their new rights.

"The new law is a pretty big step forward for consumers in leveling the playing field against credit card companies," Cordray said. "The provisions offer new protections that will eliminate many of the sneaky, one-sided practices that made credit card transactions so confusing and unfair to consumers."

Cordray highlighted the following key elements of the Credit Card Accountability Responsibility and Disclosure Act of 2009:

• Prohibits unfair rate increases: In general, credit card providers can no longer increase interest rates within the first year after a consumer opens a new account. They also cannot increase the rate on an existing credit card balance. Since August 2009, credit card providers have been required to give consumers a 45-day notice before increasing interest rates.
• Bans universal default: Using a practice called universal default, credit card providers could increase a consumer's credit card interest rate if the consumer was delinquent on other payments, such as a cell phone or utility bill. The new rules prohibit this practice.
• Restricts over-the-limit fees: Credit card companies must obtain approval from the consumer before allowing the consumer to charge more than the card's limit and subsequently issuing an over-the-limit fee.
• Requires a co-signer for most consumers under 21 years old: Credit card providers cannot issue credit cards to consumers under 21 years old unless the consumer demonstrates the ability to pay or has a co-signer, such as a parent, guardian or spouse.
• Requires fair payment allocation: Credit card providers can impose interest charges only on balances in the current billing cycle, eliminating a practice known as "double billing," which generally affects individuals who pay off their balance every month. They also cannot allocate payments in order to maximize the interest a consumer must pay.

In December 2009, the Federal Reserve issued new reform rules to eliminate many of the unfair acts or practices by credit card companies. The rules that go into effect February 22 are a first step in an overall federal reform movement. Additional rules will go into effect this summer.

For more information on the new credit card protections, visit www.OhioAttorneyGeneral.gov/CreditCardChanges.