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New Credit Card Regulations Approved

The Federal Reserve approved broad new regulations that are designed to protect consumers and limit the ability of credit card issuers to raise interest rates on account holders that carry balances. The new rules however, will not take affect until July 2010.

For the first time in decades the government is acting in the best interest of the consumers and not the credit card companies. In years past the well financed lobbyists employed by the credit card issuers have been extremely effective in promoting the agenda of their employers… to the detriment of the consumer.

Now, after receiving more than 65,000 comments, which were actually pretty much all complaints, the Fed has decided that enough is enough. The sheer volume of comments on the Federal Reserve Board’s web site focused on a single industry served as a wake up call. It is by far the most comments they have received on a single subject.

The new rules mandate that the credit card issuers:

  • Give credit card account holders at least 21 days to pay their bills.
  • Prevent issuers from raising the interest rate on existing balances.
  • Limit the fees charged for customers that exceed their credit limit.
  • Not make offers of credit that are misleading and deceptive.
  • End the practice of double-billing when computing balances.

The new regulations also address the following:

  • Payments in excess of the minimum required must be applied to the balance that is charged the highest interest rate.
  • Give cardholders 45 days notice on any changes made to the terms and conditions of the account.
  • Cap the upfront fee charged on sub-prime credit cards while giving the consumer one year to pay off the initial balance.

Once again we remind you that the new rules will not go into affect until July of 2010.

Related Information:

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