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Consumer rights in multiple annual percentage rate scenarios

Credit card debt can be one of the most frustrating and destructive liabilities for a consumer. Fortunately, the government recognizes that consumers deserve some protections against lenders who may use unfair or even dehumanizing practices. Under the Credit Card Accountability Responsibility and Disclosure Act of 2009, consumers are afforded a number of rights that can help them manage credit card debt more effectively and avoid unfair treatment in the process.

One of the most crucial tenets of the act involves consumers who have more than one annual percentage rate being applied to debts with a single lender. A common example of this might be a credit card that employs separate rates for regular purchases and cash advances. Under the CARD Act, it is the right of a consumer to have their payments put toward the highest APR first, which is a huge step forward in fair treatment of the consumer.

Among the practices that have previously been used by lenders (and may still be used by lenders who flout the new rules), applying payment to a lower APR's before a higher one was often a factor for consumers who found themselves drowning in debt. Under the new rules, the right to have payments applied to highest APR's first ensures that your payments go the furthest toward paying down the debt that has been accrued, instead of allowing the higher APR to accrue debt more quickly.

The CARD Act offers a number of other protections for consumers who use credit cards, all of which are aimed at minimizing instances of unfair treatment by lenders. If you are feeling overwhelmed by credit card debt, or believe that you are the victim of unfair practices by a lender, an experienced attorney can help you understand your rights and protect them as you work to overcome your debt.

Source: findlaw, "Credit Card Rules and the CARD Act," accessed Jan. 12, 2017

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