by
mhoewing
14. July 2010 10:00
In case you haven’t heard about the new credit card rules issued by the Federal Reserve, there are changes coming our way on August 22, 2010. Beginning that day, credit card fees will be limited in final regulations recently released in response to Congressional reforms late in 2009. This all took place because Congress asked that “reasonable and proportional” penalty fees for credit cards be developed.
The specifics
The new rules provide that credit card users can be charged a maximum of $25 for the first time they violate the terms of their written agreement, i.e. paying late or exceeding their spending limit. Within the next six months, if the consumer pays late or exceeds the spending limit again, they may be charged as much as $35.
I thought that one of the more interesting provisions in the regulations was that penalty charges will not be allowed to exceed the amount of the violation. For example, a $25 fee cannot be charged for exceeding the credit limit by $2. So, from now on, the maximum penalty allowed in a case like this would be $2. In addition, consumers cannot be charged “inactivity fees” when they do not use their accounts and card issuers must reevaluate any cards on which they have levied rate increases since January 1, 2010. From everything I’ve read and heard the inactivity fees and the cap on the excessive penalty charges were among the most pressing issues for consumers.
