Over the last few months, the rules and regulations governing credit cards have seen a tremendous change. All these changes are due to the persistent efforts by the legislation that was approved the President a year ago.
The new rules that started being implemented in various phases since last summer are all set to be complete with the final set of regulations coming into place from the 22nd of August, 2010.
Financial experts believe that some new regulations will immediately work in the favor of the customers; however, it is also true that there will be newer concerns cropping up.
The CARD (Credit Card Accountability, Responsibility and Disclosure Act) Act that came into effect in 2009 has not only increased the tenure for which the consumer has to continue making minimal payments, but it has also curbed the sudden increases in the rate of interest on the card. The final set of regulations that are all set to come into effect from the 22nd of August will also target gift cards in addition to the regular credit cards.
The biggest change that will be brought about by the rules that will be implemented towards the end of August is the limit of the late fees being charged to customers. There will be an upper limit on these charges which have been as high as $39 in the past. With the new regulations coming into play, the credit card providers cannot charge you more than $25 as late payment fees.
The new set of rules clearly outline that the amount being levied by the bank as late fee on your account can exceed the minimum balance that you need to pay. This implies that if the minimum balance due to the bank is $15, the late fees being levied by the bank cannot exceed $15.
A financial analyst, Greg McBride said that the new regulations will not prevent the banks from levying the late fees; it will only enable customers to understand the process well and place a cap on the fees.
There are other benefits to the customers as well. They will no more be charged the inactivity fee which is the fees currently being charged by banks for customers who hold their cards but fail to use them. Also, credit card companies that increase your rate of interest have to re-evaluate it every six months to see if the increase is justified and if they need to continue with the same rates or lower it.