CARL WATTS & ASSOCIATES

October 11, 2010

www.carlwatts.com
office@carlwatts.com
Washington DC
 tel/fax 202 350-9002
Credit Cards
New Rules & Regulations
August 2010
TOP
Additional fee protections


  • No inactivity fees (for not using your card for instance).
  • One-fee limit, which means that you can only be charged once for a single event or transaction that violates your cardholder agreement.



Explanation of rate increase

  • If your Annual Percentage Rate (APR) is increased, the credit card company has to tell you why.


Re-evaluation of recent rate increases

BEFORE:

  • Your credit card company could increase your card’s APR without having to re-evaluate your rate increase.



NOW:

  • For any rate increase since January 1, 2009, your credit card company is required to evaluate whether the reasons for the increase have changed and, if appropriate, to reduce the rate. Credit card issuers must re-evaluate a rate increase every six months and any rate reductions must occur within 45 days after completing the evaluation.


Remember, if you want to learn more about how these new rules directly apply to you, contact your credit card company by calling their toll-free number.
You may remember our Newsletter on April 26 (or not :-)
http://carlwatts.com/newsletter/april26_2010.html
where we outlined the most important changes brought by the CARD Act earlier this year.
Well, a final batch of consumer protection rules from the Federal Reserve regarding the credit card industry took effect on August 22, 2010.

As of this date, you can expect the following key changes from your credit card company:


Reasonable penalty fees

BEFORE:

  • The late payment fee could be as high as $39, whether you were late with a $20 minimum payment or a $100 minimum payment.

NOW:

  • The late payment fee cannot be higher than $25, unless:
* One of your last six payments was late, then the fee may be up to $35, or

* The credit card company can prove that the costs incurred as a result of your late payment justify a higher fee.

  • The late payment fee cannot be higher than your minimum payment. Say your minimum payment is $20, then your late payment fee cannot be more than $20.

  • Similarly, you can’t be charged an over-the-limit fee that is higher than the amount you exceeded your credit limit by.