Newer rules to clamp down on unfavorable credit practices are in the pipeline. Despite the final phase of the CARD Act is due to be implemented from the month of August, credit card companies are working overtime to find newer ways to ensure they don't let the new regulations hamper their revenue. Banks and other financial institutions are coming with various unheard fees to leverage their losses.
In order to protect the consumers from the sky high interest fees and a myriad of irrelevant fees, the CARD Act came into effect early this year. In addition to curtailing the fees and the interest rates, this Act also improved the transparency in the transactions.
One of the many rules that have already come into effect in the first phase of the implementation of this Act is the need for banks to give their credit card customers a time duration of 21 days to make their payments and also a notice period of 45 days in case of any change in the existing rate of interest.
Added to this, credit card lenders cannot levy over the limit fees and also they are refrained from increasing the interest rates on the credit cards until the payments are late by two months. With newer rules coming into play in August, credit card lenders cannot charge their customers the inactivity fee which is the fee they had to pay for not using their card to make purchases. Also, the banks cannot levy multiple late fees on the same account. They can only charge one late payment penalty at a time on a card.
While this indeed spells good news to customers, banks are making sure they don't lose much in this process. They are finding innovative ways to work around these new regulations.
Credit.com's personal finance advisor, Gerri Detweiler, said that the implementation of the CARD Act has curbed many of the abusive practices by the credit card lenders. He however also added that a lot of people felt that this Act did not benefit them in any way.
You will be well protected by this act if you use your credit wisely. Make your payments on time, at least the minimum due, so the banks don't have any reason to charge you in excess. Remember, you have an option of rejecting the increase in the interest rates since the banks will give you 45 days to make your decision to retaining the card or closing it.
