If you have a credit card or two (and I've been known to have many more than two), you might be interested in knowing about some recent changes designed to protect you from certain credit card fees and rate increases. They're part of the provisions of the Credit Card Act's amendments to Regulation Z (Truth in Lending).Yesterday the latest set of rules for credit card companies was issued. Essentially, if you are late making your minimum payment, your credit card company can't charge you a fee of more than $25 unless:
- one of your last six payments was late (in which case your fee may be up to $35), or
- your credit card company can show that the costs it incurs as a result of late payments justify a higher fee.
In addition, your credit card company can't charge a late payment fee that is greater than your minimum payment. So if your minimum payment is $20, your late payment fee can't be more than $20. Similarly, if you exceed your credit limit by $5, you can't be charged an over-the-limit fee of more than $5.
Other recent changes include:
- Your credit card company can't charge you inactivity fees, such as fees for not using your card.
- Your credit card company can't charge you more than one fee for a single event or transaction that violates your cardholder agreement. For example, you can't be charged more than one fee for a single late payment.
- If your credit card company increases your card's Annual Percentage Rate (APR), it must tell you why.
- If your credit card company increases your APR, it must re-evaluate that rate increase every six months. If appropriate, it must reduce your rate within 45 days after completing the evaluation.
Interested in reading about the first set of rules for credit card companies that came out in February? See the Federal Reserve's What You Need to Know: New Credit Card Rules Effective Feb. 22, or visit the FAQ at USA.gov.
What do you think about the new credit card regulations?"
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