Millions of credit card users in the United States jumped with glee on Tuesday when the Federal Reserve embraced some new rules and regulations that would help cap the late fees being charged to consumers who were already struggling to pay their current dues.
This change adopted by the Federal Reserve is the second milestone this year that is aimed to helping consumers overcome their credit crisis by enforcing some stringent rules to curtail the various fees being levied by the banks and other financial institutions that issue credit cards to consumers. This is the second instance this year that the Federal Government is taking measures to ensure the credit crisis is kept under control by levying a few critical restrictions on the credit card companies. The current rule approved in the month of May will come into effect from the 22nd of August, 2010. This rule will not only cap the late payment charges at $25, but will also eliminate the inactivity charges which the customers are paying despite not using their card for any purchase.
This rule is another addition to the set of regulations that the government plans to bring in by the end of December this year so that the lending industry can be restored to normalcy at the earliest.
The changes that are being made to the credit card industry are a long time coming since consumers have been complaining about many unethical practices on the part of the industry like collecting high late charges and adhoc increase in the interest rates on cards that is throwing them off balance.
People are finding it very encouraging to see Washington being actively involved in helping ease out the woes of people. However, they also felt that there is more that the Congress can do.
If the Congress can leverage the same rules it is implementing in the credit card segments to the mortgage industry and the payday loans segment, it can go a long way in helping people overcoming their debts fast and thus reviving the economy at a faster pace. It will also stop the unethical practices in this segment as well.
These moves are not just being made to safeguard the consumers, but also to prevent the economy from another crash. As of now, people are happy that their problems are being heard and measures are being taken to protect them from falling into the debt trap further.