Now with Reasonable Penalty Fees
Penalty fees will come down. If you miss a payment your late fee might be as high as $39 today, and it wouldn’t matter if your minimum payment was $20 or $300. However, come August 22, the worst you would pay in a late fee is $25. They only way you would pay more (Says the Government):
- 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.
What’s more, your credit card company can’t charge you a late payment fee that is greater than your minimum monthly payment. Also, if you go over your credit limit, your card company can’t gouge you. I think the maximum over limit fee is $5.
Some more protections from fees
The company cannot charge you an inactivity fee for not using your card. I can’t believe they ever got away with that to begin with.
Credit card companies will no longer be able to charge you multiple fees on any single event or transaction that breaks your cardholder agreement. So no longer can you get double dinged for a single late payment.
Need to explain any rate increases
You’ll have more advanced warning about Annual percentage rate (APR) increases and if they do raise it they have to tell you why. They need a good reason.
Recent rate increases?
No longer will your credit card company be able to raise your card’s APR with no obligation to re-evaluate your rate increase. So if you improve your credit rating for instance, they have to take a look at that and hopefully lower your APR.
In fact under the new rules if your credit card company increases your APR, every six months it has to re-evaluate that rate increase and if it you pass that evaluation with improvement, your card company should have to reduce your rate within 45 days
The Credit Card Accountability, Responsibility, and Disclosure Act is a good thing, and will help consumers in the teeth of one of the worst recessions since the Great Depression.
