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All Hail The New Credit Card Rules In August 2010
Well, well well, what most of us common folk have who own a credit card will more than likely agree with the government's steps in to putting an end of the credit card industry's most devious acts to scrape people's money. As recent as of June 2010, the Federal Reserve adopted new rules that are aimed at protecting credit card customers from getting socked by lofty late payment charges and other penalty fees. Ever since the credit card act was put into play, the credit card industry still had the upper hand in collecting late penalty fees for those who didn't make their minimal payment. The rules respond to public and congressional outrage over practices by credit card companies.
It is official that these amended rules will take effect on Aug. 22 2010. As part of the new rules, credit card companies will be capped at $25.00 in charge for those folks who miss their monthly payment due. The rules will prohibit credit card companies from charging penalty fees that are higher than the dollar amount associated with the customer's violation. As an example, if you only owe $10.00 on your credit card bill, the credit card company can no longer charge more than $25.00 which will likely be less than $10.00 (the original balance). They also ban so-called "inactivity" fees when customers don't use the account to make new purchases and they prevent multiple penalty fees on a single late payment.
Folks will finally be protected from the worst credit card issuer abuses, because this is actually where credit card companies have raped their customers for many years and has made serious profit.
In addition, the rules require companies to reconsider interest rates imposed on customers since the start of last year. Some lenders pushed through rate increases ahead of the first phase of sweeping new credit-card protections, which took effect earlier this year. Those first set of rules were designed to protect customers from sudden hikes in interest rates.
The U.S Congress directed the Fed to apply the new credit card protections in legislation signed into law by President Barack Obama last year.
With the new rules, it requires that late payment and other penalty fees be assessed in a way that is fairer and generally less costly for consumers as well as the credit card companies must also reevaluate recent interest rate increases, and, if appropriate, reduce the rate. As an example, people who have demonstrated excellent credit card practices may be apt for a lower interest rate on their credit card.
As this is a hail for the average person, these new rules will be moving swifter and will be applied quickly, according to The American Bankers Association.
Legislation in Congress revamping the nation's financial regulatory structure could reduce the Federal government's influence over consumer protections. A watchdog agency inside the Federal agency will be set up by the Senate. What this means that chairman Ben Bernanke would have no authority over it. On top of this all, a House-passed bill would set up a new agency devoted to consumer protection and would strip the Fed of some of its consumer oversight. Lawmakers are working to reconcile the bills into a final package.
So sit tight folks, there may be an end to ridiculous money grabbing practices from the credit card companies that may prove positive for us regular folks.
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