Guarding consumers from rate of interest hikes, heavy late fees and other penalties are the focus of new credit card rules approved by the Federal Reserve on June 22. Since the 2009 credit card law was passed last May, credit card companies have tried to stay a step ahead of the law with creative new fees and penalties. The new credit card rules announced Tuesday by the Fed go into effect Aug. 22. The provisions close some loopholes and complement rules in 2009 credit card law already in effect.
Article Source: New Federal Reserve credit card rules beef up consumer protection
Ceiling on credit card late fees
The new credit card rules are the finishing touches of the Federal Reserve’s effort to carry out the credit card legislation President Obama signed last year. A primary goal of credit card legislation was reducing penalty fees and Congress left it up to the Fed to say how. CNNMoney.com reports that consumers will most quickly notice the new penalty fee limit of $ 25. There are some exceptions. The credit card business can charge up to $ 35 (which they will) for a lot more than one late payment in six months. Most credit card late fees are $ 39 until Aug. 22.
Credit card penalty fees limited
Penalty fees for exceeding credit limits are limited with the new credit card rules. Forbes reports that the penalty fees cannot exceed the dollar amount of the consumer’s violation. For example, a credit card business can no longer charge a $ 39 fee when a customer exceeds his or her credit limit by $ 20. From now on $ 20 can be all they get. But the credit card company could nevertheless penalize the customer with a higher interest rate on future purchases. Credit card companies can also no longer charge an inactivity fee on cardholders who don’t use their cards.
A reconsideration of interest rates
High credit card rate of interest hikes imposed on customers since Jan. 2009 in response to the credit crunch will be subject to review by credit card companies. The New York Times reports that credit card companies may have to lower interest rates if the reasons it raised them no longer apply following a re-evaluation.
Need to know – new credit card rules
The Fed is offering consumers more information online about how the new credit card rules affect them with “What You Need to Know: New Credit Card Rules Effective Aug. 22.
Additional information at these websites
money.cnn.com
forbes.com
bucks.blogs.nytimes.com
www.federalreserve.gov
