Millions of consumers have seen the commercials. An official looking spokesperson appears on the television screen, with a picture of the President of the United States in the background, and announces a special new debt relief plan endorsed by the White House. The problem is - it isn't true.  

When the Credit Card Accountability, Responsibility, and Disclosure Act (better known as the Credit CARD Act) took effect in February of 2010, there was a whirlwind of public confusion surrounding the credit card industry and the debt millions of consumers owed.   

Many speculated that this Act implemented a federal program aimed at providing relief grants to individuals with credit card debt.  A simple Web search for "Obama credit card debt relief" even displays countless sites that appear to be news articles or press releases about federal government-sponsored debt settlement services.  The articles claim legitimate help through a federal bill called Obama Credit Card Debt Relief that offers assistance to consumers with over $10,000 in unsecured debt. The articles link to company financial websites that note debt settlement support by the federal government at no cost to the consumer.  

Some debt relief agencies have taken advantage of the misleading discussion on debt and altered their marketing messaging to target consumers with buzz words that would garner their interest in debt relief.  These companies claim credit card reform and economic stimulus packages stemming from the federal government are direct endorsements of their debt relief services.   

But the truth is no debt relief company operates under supervision of the federal government or the Obama administration at this time and there is no such thing as the Obama Consumer Bailout. No federal credit card debt relief program exists.   

The Whole Truth and Nothing But the Truth 

As noted in a Wall Street Journal story, the Credit CARD Act does little to relieve Americans from existing credit card debt.  Further, consumers should be careful about working with a company that claims to be backed by the federal government or offers to erase debt at no cost.  

Here are the facts: The Credit CARD Act is part of a long-term, wide-spread attempt to ease the debt burden on consumers legally. Now we're not talking about ERASING your debt; only you, as a responsible cardholder who upholds your promise to repay your creditors can do that. Instead, the purpose of the Act is to bring clarity to the amount you owe by clearly detailing in billing statements your balance amount, and what you'll pay over the life of your debt including interest if you pay off your debt over 36 months or make only minimum payments. The Act also holds card providers to a higher standard to prohibit unfair rate traps, retroactive increases to your interest rate, or any changes to your rate or terms without proper notification. Basically, there's now some accountability and oversight in the credit card industry to protect consumers. 

But let's be perfectly clear. While many view the Act as a step in the right direction toward improving the amount of debt consumers may have, the Act does not directly address debt relief or settlement.   

Another fallacy is that the government's "stimulus package" (the American Recovery and Reinvestment Act) also bailed out consumers from their debts. The hard truth is that the only thing this package stimulated were tax cuts and the bottom lines of large businesses that were staring down potential bankruptcy. Other spending from the Act is supporting state-initiatives to help them balance budgets, fund highway projects, strengthen social problems, spur job creation, and more. Consumers are wrong to think the stimulus package is supposed to bail them out of credit card debt. 

At the end of the day, it is vital for consumers to know there is no government debt relief program or Obama credit card bill. For more information on how to find a reputable debt relief provider, a list of tips is available here from CareOne.  

The Federal Trade Commission website provides consumers many helpful tips for protection from companies that claim to be supported by Obama's reforms.   The Better Business Bureau can also provide a credible debt relief company to consumers interested in services.  Visit the Better Business Bureau website at to access a local directory in your state. 

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Jenny Realo

Jenny Realo is the Chief Product Officer for CareOne Services, Inc. She is also a contributing writer to the Straight Talk on Debt blog. From her experience working in the finance industry for over 21 years she provides readers a unique inside perspective on how to protect their rights and manage their debt.