The Federal Reserve Board announced Tuesday a new rule to protect credit card users from unfair fees. The rule caps credit card late fees at $25. Many credit card companies have been charging upwards of $39.
The new rule, which goes into effect on August 22, 2010, will also prohibit credit card companies from charging penalty fees that exceed the amount of the violation. For example, if a consumer is late paying a $20 minimum payment, the late fee cannot exceed $20.
Further, the rule bans inactivity fees – or fees charged to consumers for not using their credit card often enough to make purchases.
While the Fed’s new rule brings greater fairness to credit card practices, just a few months after the new Credit CARD Act was put into effect, it does not protect consumers who are repeatedly late with payments.
For more information, check out the Fed’s guide to the new credit card rules. And for more tips and tools to help you manage your home, money and credit – including the most affordable credit monitoring on the web and complete identity theft protection – visit Quizzle.com.
More from the Quizzle Wire:
- 10 Credit Score Facts and Fictions
- Consumers Beware: Applying for Credit Can Torpedo a Credit Score
- Personal Finance 101: Credit Cards
- How to Use Credit Cards to Your Advantage
- The Pros and Cons of Paperless Billing
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