No More Big Credit-Card Penalties!
Plus: you can’t get fined if you don’t use your card.
Those of you out there (and you know who you are) who are always late with credit-card payments are getting some good news: Credit-card companies are now forbidden to charge any more than $25 for a late payment.
The rule, which goes into effect Aug. 22, was issued by the Federal Reserve. Until now, the median penalty fee has been $39.
The federal agency also ordered a review of all increases in credit card interest rates since January 2009. Companies who increased their rates will have to prove to federal regulators that the hikes were justified.
Rep. Carolyn Maloney, D-NY, who was instrumental in creating the new rules, said, “The Federal Reserve’s guidelines issued today are great news for consumers.” And Federal Reserve Governor Elizabeth Duke said the new regulations are “fairer and generally less costly” for credit-card users.
However, consumers can still be charged more than $25 if they have a repeated pattern of late payments or if they go over their credit card limit twice in two months.
Another regulation specifies that consumers won’t be charged a fee, known as an “inactivity fee,” if they don’t use their credit cards.
Jane Farrell is a senior editor at BettyConfidential.