Credit Card Relief

A final piece of the Credit Card Accountability, Responsibility, and Disclosure (CARD) Act of 2009 legislation went into effect, shielding credit card users from “unreasonable late payment and other penalty fees”.

It’s a two-part benefit for credit consumers.  First, it puts a limit of $25 for late charges and other fees except in extreme circumstances.  Those circumstances include repeat offenders, and where it can be shown the costs of recouping exceeds the $25 limit. 

Another restriction now in place is that a late or overdraft fee cannot be higher than the charge in question.  Also, consumers cannot be charged more than one fee per infraction.

The second benefit to this legislation it it also encourages credit card companies to reconsider rate increases from January 1st, 2009.  While it doesn’t appear to be mandatory, the banking industry holds that it has already been modifying rates in accordance, especially since many rate increases were based on large fees that now do not exist.

However, credit card companies now may not raise interest rates on customers who pay their bills on time.  They must also give at least 45 days notice before any rate hikes or fee changes.