Although the complete reforms for credit cards came into effect only a few months ago, the Fed is proposing a fresh set of changes. Most of these changes also come as a proof that the Fed is closely monitoring the strategies of credit card companies and reacting to them in good time to. The proposed amendments have been released largely to clarify the terms of the reforms and iron out any loopholes that have allowed credit card issuers to take advantage of the customers in different ways or cut corners.
One of the most important reforms proposed is that the issuers much check the independent income of an individual and the assets. This is because the original CARD Act mandated the checking of customer's ability to pay for the new account or even before a hike in the credit limit. But given that a household income is more than the individual income, in most cases, the Fed has currently come up with this new amendment. This clarification will help prevent spouses and children with no income or assets from getting a card on their own. However, joint accounts can still be used to allow credit cards to non-working spouses.
Another proposed amendment is on the fact that the CARD Act prevents issuers from revoking promotional interest rates except in the case, when customers don't make payments for more than 60 days. The Fed has now clarified that this rule will be extending not just to the promotional interest rates but also to other waivers, fees and rebates that are offered to the credit card customers. The line of thinking for this amendment is that a promise has to be kept unless the customer proves inconsistent with his or her payment.
The CARD Act has also prohibited fee from exceeding 25 percent of the original credit limit in the first year after opening the account. However, those customers who have a bad credit are facing trouble as some of the cards are including high application fees and upfront fees, so that there isn't much left on the card to spend anyway. The new amendment looks to clarify that the fee also includes application fees and any other upfront fee that is paid even before the new account is opened. This amendment is required to prevent credit card companies from exploiting the rule and charging high application and upfront fees for the new accounts.