The Federal Reserve Board announced new rules this week on credit cards that will benefit credit card holders. The rules will begin on August 22 of this year. The new rules will affect several key areas of credit card use:
Late fees. Under the new rules, credit cards cannot charge more than $25 for a late payment fee. Currently, many credit card companies charge up to $39 in late fees. However, if one of a customer’s last six payments was late, credit card companies can charge a $35 fee. In addition, the late payment fee cannot be higher than the minimum payment due.
Changes in APR. Under the new rules, if a credit card company increases your APR, it must reconsider that rate increase every six months. If appropriate, it must reduce your rate within 45 days after the evaluation. If the company decides to raise your APR, it must now tell you why.
Additional Protections. Credit card companies will now be prevented from charging inactivity fees to customers who do not use their cards. Also, credit card companies cannot charge more than one fee for a single transaction that violates your credit card agreement.
These new rules are positive changes for credit card holders. To read more about the rule changes, click here.