Credit Cards: Feds Proposes New Credit Card Rules
New credit card rules proposed by the Federal Reserve may prevent banks from ending low interest rates on an introductory period prematurely. The ruling comes several months after new rules took effect that prevents credit card companies from raising rates more than once in a year and reduced the fees many banks charged on debit cards.
The new rules are not without confusion, and many credit card companies are not sure how to apply the laws. The Federal Reserve has proposed additional changes to help prevent confusion under the new rules.
When Companies Can Raise Their Credit Card Fees
Companies cannot raise fees on a consumer’s credit card unless he falls more than six months behind on his payment. A new rule affects people who try to apply for a new card rather than a consumer who already has one. New regulations recommend limiting the amount of fees a credit card issuer can apply for a person to open a new account. Perhaps the most important change comes in issuing decisions. Credit card companies can no longer consider a household credit, but have to consider an individual’s credit rating. The last rule will make it easier for some people to get credit.
When Will the New Credit Card Law Changes Take Effect
The new credit card rules have not been fully discussed yet and are under debate. While the changes that were required by a 2009 law are no in effect, credit card companies are waiting for further regulation. At the moment, credit card companies are interpreting the policies according to individual interpretations of the rules. The Federal Reserve hopes that clarifying the new rules will provide additional protections for consumers. The original piece of legislation was designed to protect customers from excessive fees and extremely high interest rates on credit card balances.
Posted by Lindsay Aplin
on Oct 20 2010. Filed under Business, Featured, Personal Finance, Washington.
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