Consumers Stand To Benefit From The Latest Credit Card Rules

In order to ensure that the customers are relieved from the burden of their debt to a certain extent the Federal Reserve, in the beginning of last week, enforced a few more rules and regulations that credit card issuers need to abide by. These rules have been enforced to ensure that customers don’t get penalized for the smallest of errors.

Thanks to the implementation of these new credit card rules, the days when customers had to pay exorbitant amount as fees to the credit card companies will soon become a thing of the past.

There are a number of new laws that are designed to favor customers and give them the much needed relief and provide a way to clear off their credit card dues faster. In addition to curbing the banks and other financial institutions from levying heavy fees on the cards, these rules also ensure that the maximum late fee amount should not exceed $25, especially for first time defaulters. However, for credit card accounts that are due over the last 60 days, the late fee will have a cap of $35. Another point in the benefit of the customer is that the late fee that is being charged should not exceed the total outstanding balance on the card. This implies that if the total outstanding on the credit card is $18, the late fee being charged for delayed payment should not exceed this amount.

The rules also stipulate that that banks and financial institutions issuing credit cards cannot charge late fees multiple times on the same card for the first instance of delayed payment. Credit card lenders are also barred from colleting inactivity fees which the customers had to pay for not using the card, despite having them on hand. In addition to this, if credit card lenders are planning on increasing the interest rates on the cards, then, they will have intimate the customers about this change at least 45 days in advance and give them an option to close the credit card if they don’t want to accept the change in interest rates.

Banks have also be informed to review the accounts of their customers periodically, once every six months, and ensure that they are being charged reasonable interest rates. If the banks notice any inappropriate high interest rate, they have to reconsider their decision on that account and offer more reasonable rates. The other type of fee that has been shown the door because of the implementation of these rules is the recurring late payment fee.