June finally the much awaited and feared Credit CARD act has come to its final details setting out new rules that have stunned a lot of credit card issuers all over the country. The government has laid down a new set of rules that all credit card issuers and banks should abide by. These rules were set to help citizens pay up their debts in an easier and lesser way.
Written in this new set of rules are a few modifications of previous credit and debit card laws. Along with these rules is the amount of penalty fee each credit card issuing company and bank could ask from their clients. On August 22, all credit card issuing company is told to set $25 penalty fee for first time over due payers and for consumers who have gone far and have violated a lot on the company`s policies would receive a fixed price of $35. Any amount higher than the set amount by the law and the government would immediately be punished. On top of this, the rule also sets an over limit charge for specific amounts of transactions wherein the cardholder would be in a situation where he exceeded his credit limits.
Now, with the newly developed and further modified Credit CARD act, consumers are less likely to experience overly priced fees over the summer. Under this new set of rules, each cardholder must request their credit card issuer to allow certain charges which are away from their regular credit card limits. Only a few of American consumers have responded to their credit card issuers to opt in which have led a growing concern to a few economists and market analysts about the shrinking profits of the banking industries.
This has actually led a few banks to report bankruptcy and has gone out of business in just a short period of time. However, even if banks have been tightly leashed on by the government, they are currently trying to win over their possible and obvious losses with the decreasing number of credit card delinquencies and rate of credit card defaults. May has actually marked the fifth consecutive month for this positive news for banking industries especially credit card issuing companies who would be greatly affected by the Credit CARD act. Analysts have also said that with this continues decrease in delinquents and defaults, the banking industry would feel possibly a slight change when the new rules have been implemented.