New Credit Card & Gift Card Legislation to Protect Consumers Ahea

In an effort to protect credit and gift card holders, Governor Kathy Hochul has signed a package of legislation that prohibits gift card fees and limits expiration dates.

The legislation protects credit card holders by creating a grace period for the use of reward points after the closing of the account. The other piece of the package addresses gift cards and gift certificates, prohibiting fees and expiration dates. Governor Hochul

As we enter the holiday season of giving and New Yorkers buy gifts for their friends and family, it's more important than ever that we protect them from unfair practices that have a real impact on consumers' bottom line. This legislation will guarantee a season of good cheer in New York State by making sure that no New Yorker unfairly loses their accumulated credit card rewards or is shortchanged when buying a gift card for a loved one.

In looking deeper at the legislation that pertains to credit cards, there is often fine print that is associated with reward programs that consumers may not realize. This legislation creates a grace period so that consumers can use reward points after closing an account. It seems like there is a provision for many credit card accounts that lets the card issuer to cancel all benefits or reward points when a card is closed, and that prohibits the consumer the time to use those points or rewards they have accumulated. The explanation goes on to address the consumer protection issue of why someone closes their account:

This becomes a consumer protection issue when the issuer unilaterally closes an account for reasons such as a holder failing to make a payment, or for unspecified reasons that fall under catch-all clauses such as if the issuer believes the holder may be unwilling or unable to pay their debts on time.

With regard to gift cards and gift certificates, this part of the legislation package prohibits fees and expiration dates. As many of us know, gift cards and gift certificates can decrease in value if not used within a certain time period. There are also a number of cards sold with fees that can impact the value of the card itself. The bill also prohibits expiration dates on gift cards and gift certificates that occur earlier than nine years from the card being issued, and also allows for redemption when the remaining balance is less than $5.00.

These two pieces of legislation come just in time for the holidays when most of us will be purchasing using credit cards, and both giving, and receiving, gift cards.