Sunday consumers will be given more protection from deceptive and unfair practices by credit card companies.
Credit card statements will be easier to understand with more information about how long it will take to payoff debt as well as contact information for nonprofit credit counseling agencies.
Credit card companies cannot charge a penalty fee of more than $25 in most instances.
Currently, the penalty fees on credit cards is about $39 but with the changes most late fees and over-limit fees for a second violation in six months will go up to $35. However, the fee may be higher if the credit card company can justify that due to a cardholder's late payment the costs incurred by it were more than $25.
The credit card company cannot charge a late payment fee greater than a cardholder's minimum monthly payment. This curbs the practice of companies adding a $39 late payment fee because the customer is a few days late on a $10 minimum payment.
Moreover, companies can no longer charge a fee for dormant accounts. In other words, you cannot be charged a fee or have your credit card account closed because you don't use the card enough.
Card companies are required to give customers 45 days notice before an interest rate hike. If the company raises the annual rate they have to explain the reasons for its hike. Banks must review a rate increase every six months to decide whether the increase is still warranted. If the factors that prompted the hike are no longer applicable, the rate must be lowered.
In a move designed to prevent youngsters from accumulating debts they cannot repay, the credit card reform bill prohibits lenders from issuing cards to individuals under 21 unless they can prove they can make payments or get a parent or guardian to co-sign.
And lastly, credit card companies can no longer charge more than one penalty fee per transaction. Consumers will no longer face multiple penalty fees for the violation of a single late payment.
Unfortunately because the credit card companies are soon to loose the ability to screw the consumer, they rushed to raise rates before it went into effect.
http://blog.oregonlive.com/finance/2010/...