Over the weekend, several changes to the Credit Card Accountability Responsibility and Disclosure (CARD) Act took effect. These updated regulations benefit consumers by eliminating some fees and establishes new rules for rate increases. Consumers are urged to check their credit card statements closely each month.
According to the Federal Reserve Board, here’s what these new credit card rules include:
- Reasonable late-payment penalty fees. In the past you paid the same expensive late fee whether your minimum required payment was small or large. The new rule says that your credit card company can’t charge you more than $25 for a late payment unless you’ve been late on one of your last six previous payments, in which case it can up the fee to $35. Also, it can’t charge you a late payment fee that’s more than the minimum payment you owe. So if your minimum payment is only $10 this month, then $10 is all the company can charge you as a late fee.
- No inactivity fees. No more being charged a fee for not using your card enough.
- One-fee limit. You can’t be charged more than one penalty fee for the same transaction.
- Explanation of rate increase. If your credit card company increases the Annual Percentage Rate (APR) it charges you, it has to tell you why.
- Re-evaluation of rate increases. If your credit card company does increase your APR, it has to re-evaluate that rate increase every six months. If it decides to lower your rate based on that evaluation, it has to do it within 45 days after completing the evaluation.
For more information on the CARD Act, please see the Federal Reserve Board’s site at www.federalreserve.gov/creditcard. To file a complaint against a business, please contact us at www.newyork.bbb.org.