Credit Cards Companies Must End Corrupt Practices in New York
New York officials are making major changes to credit cards and gift cards to "protect" Empire State residents.
Just before Christmas, Gov. Kathy Hochul signed a package of legislation that officials believe will "protect" New Yorkers from "exploitative credit and gift card practices in New York."
New York State Cracks Down On Exploitative Credit and Gift Card Practices
One bill will create a grace period for Empire State residents to use credit card reward points after closing a credit card account. The other bill will ban fees and expiration dates on gift cards and gift certificates.
"It's more important than ever that we protect them from unfair practices that have a real impact on consumers' bottom line," Hochul said. "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."
Change To Gift Cards Sold In New York
Legislation S.3467-B/A.4629-C prohibits fees and expiration dates on gift cards and gift certificates.
"Many gift cards are sold with a variety of fees attached that can significantly reduce their value. These include fees paid at the time of purchase and dormancy fees for failing to use a gift card for a certain period of time," Hochul's Office stated.
The new bill will ban all fees on gift cards and prohibit gift cards that decline in value over time.
"It's just wrong to receive a gift card or gift certificate only to learn later that the value of the gift has automatically declined in value over time, or has expired. That is why I introduced this legislation to prohibit all fees on gift cards and certificates purchased in New York," Assemblymember Nader Sayegh said.
The new law also requires all gift cards sold after Dec. 10, 2022, to be valid for at least nine years from the date of purchase.
New Rules For Credit Cards In New York State
Legislation S.133-B/A.5698-B creates a grace period to use credit card reward points.
"The sudden and unexpected cancellation of credit card rewards points is devastating, especially for those who save them over long periods of time. Similarly, gift card policies that prey on consumers by making funds difficult to access are wrong. Consumers deserve transparency from the companies they trust with their hard-earned money," State Senator Shelley B. Mayer said.
New York officials say many are losing out on reward points because terms are not transparent to consumers.
"One particular provision in many credit card agreements allows the credit card issuer to cancel all accumulated rewards points or other rewards benefits upon the closure of the credit card account, without affording the credit card holder any opportunity to use accumulated points. 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," Hochul's Office stated in a press release.