Presented by
Federal
Reserve System
More new
rules from the Federal Reserve mean more new credit card protections for you.
Here are some key changes you should expect from your credit card company beginning
on August 22, 2010:
Reasonable penalty fees
Let's
say you are late making your minimum payment.
- Today: Your late
payment fee may be as high as $39, and you likely pay the same fee whether you
are late with a $20 minimum payment or a $100 minimum payment.
- Under
the new rules: Your credit card company cannot charge you a fee of more than
$25 unless:
- One of your last six payments was late, in which
case your fee may be up to $35; or
- Your credit card company can show
that the costs it incurs as a result of late payments justify a higher fee.
In
addition, your credit card company cannot charge a late payment fee that is greater
than your minimum payment. So, if your minimum payment is $20, your late payment
fee can't be more than $20. Similarly, if you exceed your credit limit by $5,
you can't be charged an over-the-limit fee of more than $5.
Additional
fee protections
- No inactivity fees. Your credit card company can't
charge you inactivity fees, such as fees for not using your card.
- One-fee
limit. Your credit card company can't charge you more than one fee for a single
event or transaction that violates your cardholder agreement. For example, you
cannot be charged more than one fee for a single late payment.
Explanation
of rate increase
- If your credit card company increases your card's
Annual Percentage Rate (APR), it must tell you why.
Re-evaluation
of recent rate increases
- Today: Your credit card company
can increase your card's APR with no obligation to re-evaluate your rate increase.
- Under the new rules: If your credit card company increases
your APR, it must re-evaluate that rate increase every six months. If appropriate,
it must reduce your rate within 45 days after completing the evaluation.
This
set of rules is the latest in a series of regulations that implement the Credit
Card Accountability, Responsibility, and Disclosure Act (the Credit Card Act).
For information on protections under the Federal Reserve's other credit card rules,
read What
You Need to Know: New Credit Card Rules Effective Feb. 22.
About the Federal
Reserve System
On December 23, 1913, the Federal Reserve System, which
serves as the nation's central bank, was created by an act of Congress. The System
consists of a seven member Board of Governors with headquarters in Washington,
D.C., and twelve Reserve Banks located in major cities throughout the United States.
