As the Credit CARD (Card Accountability, Responsibility and Disclosure) Act of 2009 continues to be phased in, consumers are noticing changes to their cards terms and conditions, and some consumers are finding that their ability to acquire new credit has decreased.
The last parts of the this Act will take effect on Tuesday, August 22nd. The Federal Reserve recently announced what these regulations would mean for customers. Here are the top five changes that you might see:
- Customers may no longer be charged multiple fees for the same violation. For example, if you pay your bill late, and receive a late payment fee, you can not then be charged an overlimit fee because the late payment fee puts you over your credit limit.
- Credit card issuers may not charge inactivity fees for accounts that are not being used regularly.
- Forced to limit their fees, it is likely that credit card issuers will begin reinstating annual fees on credit card accounts. Be sure to read all correspondence from your card issuer to be sure not to get trapped by surprise new fees. In addition, keep your account in good standing and lower your debt to make yourself look like a good customer that the credit card issuers want to keep.
- Late payment fees can not exceed the minimum payment due. For example, if your minimum payment is $15, and you pay late, the late payment fee may not be more than $15.
- Penalty fees for things like late payments may not exceed $25 unless either a) you have had a previous penalty in the last six months or b) the card issuers can substantiate that its costs exceeded $25.
For people who are living close to the edge of their credit, these laws might help you to reign in your penalty fees and will hopefully help you get away from your credit limit. However, these laws can not force you to behave responsibly. (I know, I’ve been there.) In general, the only way these laws will help you is if you use them as part of a plan to help yourself.
For a more comprehensive look at the Credit CARD Act of 2009, see these articles:
What? Credit Card Questions here at The Paycheck Chronicles
Credit Card Regulations: A Win for Customers? or an End to Credit? at Get Rich Slowly
New Credit Card Rules Effective August 22 at the Federal Reserve Bank