Come August 22, there will be a series of new rules in place, intended to further protect credit card holders, thanks to the good people at the Federal Reserve.

Late Fees Capped at $25

Late fees will generally be capped at $25, instead of the near-$40 currently charged by many of the nation’s leading credit card issuers.

There will be exceptions if the card holder is a repeat offender, or if the card issuer can prove the higher fee is reasonable.

Fees Cannot Exceed Dollar Amount Tied to Violation

Card issuers will also be prohibited from charging a fee that exceeds the dollar amount associated with the consumer’s violation.

For example, a card issuer can’t charge a $25 late fee if the card holder’s missed minimum payment is only $20.

Same with an over-the-limit fee – if you only go over by $5, the card issuer can only charge $5.

Multiple Fees on Single Violations Prohibited

Additionally, card issuers will not be able to charge multiple fees for a single violation, such as a single missed payment.

Inactivity Fees Banned

Credit card issuers will also be barred from charging “inactivity fees,” a strategy that was actually recently employed to recoup losses from the first set of new credit card rules.

Finally, card issuers who raised consumer’s rates since January 1, 2009 will need to evaluate if the reason(s) behind the increase has changed, and if so, reduce the rates.

I wonder how the credit card issuers will make up for all the lost profit?  Look out for new tricks folks…

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