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Old 03-05-2010, 03:30 PM   #2
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Join Date: Sep 2008
Location: Turtle Island
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Default Re: What the New Credit Card Rules Mean For You... And Your Wallet

Fed proposes rules to limit credit card fees

Fees would have to be 'reasonable' and 'proportional' to the offense

By Tamara Holmes


What: The Federal Reserve released proposed rules limiting penalty fees credit card companies can charge. For example, if consumers go over their credit limits by $20, the fee for that violation can be no larger than $20. The rules are part of the Credit CARD Act of 2009's mandate that credit card fees be reasonable and fit the violation.

At stake: Credit cardholders and consumer groups have long complained that card issuers charged exorbitant fees when card users made mistakes. In recent years, income from a smorgasbord of fees has been a key source of bank profits. That will change with this ruling.

When it takes effect: Starting Aug. 22, 2010, when the third phase of the Credit CARD Act takes effect, fees must be "reasonable," inactivity fees will be banned and credit card issuers must begin to conduct six-month reviews of accounts that have had interest rate hikes going back to Jan. 1, 2009.

What's next: The public has about a month to file comments with the Fed about the proposed rules. See box below for instructions on how to file and view comments submitted.

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