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Consumers have more protection from rate of interest hikes, heavy late fees and other penalties in new Federal Reserve Credit Card rules approved June 22. Credit card companies have tried to stay a step ahead of the law with deceptive new fees and penalties since the 2009 credit card law was passed. The latest additions to the Fed’s credit card rules become effective Aug. 22. The provisions close some loopholes and complement rules in 2009 credit card law already in effect.

Source for this article: New Federal Reserve credit card rules beef up consumer protection

Ceiling on credit card late fees

The new credit card rules are the finishing touches of the Federal Reserve's effort to carry out the credit card legislation President Obama signed last year. Congress gave the Fed responsibility for figuring out how to lower credit card penalty fees, a primary goal of credit card legislation. CNNMoney.com reports that consumers will most immediately notice the new penalty fee limit of $ 25. There are exceptions to the rule. The credit card company can charge up to $ 35 (which they'll) for more than one late payment in six months. Late fees will remain at $ 39 until the law kicks in on Aug. 22.

Credit card penalty fees pinched

Penalty fees for exceeding credit limits are limited with the new credit card rules. Forbes reports that the dollar amount of the penalty fee can no longer be a lot more than the violation. For example, if a customer exceeds the credit limit by $ 20, a credit card business can’t charge them a $ 39 penalty. Now the fee can't exceed $ 20. But the credit card business could nevertheless penalize the customer with a higher interest rate on future purchases. Credit card companies can also no longer charge an inactivity fee on cardholders who don't use their cards.

Credit card interest rates under review

Credit card companies must review the high rate of interest hikes they imposed on customers starting from Jan. 2009 when credit markets crashed. The New York Times reports that credit card companies may have to lower interest rates if the reasons it raised them no longer apply following a re-evaluation.

Knowledge is power over credit card companies

The Fed is offering consumers a lot more information online about how the new credit card rules affect them with “What You Need to Know: New Credit Card Rules Effective Aug. 22.

Additional data at these websites

money.cnn.com

forbes.com

bucks.blogs.nytimes.com

www.federalreserve.gov