Everything But The Weed

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Linda Maze, a Wedding photography Gainesville FL in Gainesville Florida

The FED (Federal Reserve) recently made  new laws  to regulate credit card companies from “unreasonable” late payment and penalty fees. The new rules also require issuers to “reconsider” interest rate hikes imposed since 2009. Millions of Americans have piles  of credit card debt that  is drowning them in fees and interest payments.

These new laws will help to solidify other credit card rules that were signed into law by President Obama as the “Credit Card Accountability Responsibility Disclosure Act” that  will take effect August 22, 2010.

“The new rules require that late payment and other penalty fees be assessed in a way that is fairer and generally less costly for consumers,” states Federal Reserve Governor Elizabeth A. Duke. “Card issuers must also re-evaluate recent interest-rate increases and, if appropriate, reduce the rate.” 

One of the main pillars  of the new regulations  is a top  in most late payment fees. Currently many credit card companies are charging $39 or more in late fees; but the new rules cap that fee at $25.

Another tenet  is to ban credit card companies from charging a fee that is bigger than the umbrage (ie a $5 late payment can only be assessed a $5 fee).

Companies  are also now banned from charging multiple fees in response to  a single late payment or other single violation of terms; and “inactivity” fees for the non-use of cards is now banned altogether.

One of the ways debtors  had been avoiding such fees is through instant approval credit cards which ordinarily do not have any fee structure .

Although the changes have received some accolades , many more are stating that the  new  regulations   
 don’t do enough to change the underlying problem; the huge sum of credit card debt that Americans are trying to get out from under.

Paul Hollender from Bloomfield-based firm Corash & Hollender states, “It’s taking away some of the most outrageous things that credit-card issuers are doing, but I think it’s not enough to stem the tide of impending bankruptcies.”