New consumer protection rules for credit card users

Jim Stark
InstantRiverside.com

On August 22, the Federal Reserve will release another set of consumer protection rules for credit card users. These rules are being implemented as part of the Credit Card Accountability, Responsibility, and Disclosure (CARD) Act.

Springboard Nonprofit Consumer Credit Management wants consumers to be aware that understanding these new changes as well as the terms of their credit card contract increases their ability to better manage their finances.

“In addition to being familiar with these provisions, consumers need to review their credit card statements promptly, and read important inserts that accompany the monthly mailings,” said Melinda Opperman, Springboard’s senior vice president of community outreach and industry relations, in a press release. “These simple steps are a critical part of creating a financially stable life.”

For more information on the CARD Act and its provisions, contact 800-449-9818.

The new set of consumer protection rules includes the following:

-The credit card company cannot assess a late fee of more than $25 unless one of the consumer’s last six payments was late, in which case the fee may go up to $35. However, if the credit card company can demonstrate that the costs it incurred as a result of the late payments justified a higher fee, they are allowed to impose a higher penalty.

-The issuer cannot charge a late payment fee that is more than the minimum payment.

-When a charge exceeds the account’s credit line, an over-the-limit fee of more than the amount charged cannot be assessed.

-The credit card company cannot charge a consumer an inactivity fee for not using their card.

-Consumers can no longer be charged multiple penalty fees for the same transaction. For instance, both a late fee and an over-limit fee resulting from the same transaction cannot be charged.

-The company must explain any increase in the card’s Annual Percentage Rate (APR). If the APR is increased, the credit card company must re-evaluate the increase every six months, and if appropriate, reduce the rate within 45 days after completing the evaluation.

Filed under Consumer News, Headline