Economic Perspectives with Hopeton Hay on KAZI 88.7 FM in Austin, TX

New Credit Card Protection for Consumers Focus of November 22 Economic Perspectives

Posted by Hopeton on August 15, 2010

Gail Cunningham, Vice President of the  National Foundation for Credit Counseling (NFCC), will discuss  the provisions of the Credit Card Accountability, Responsibility, and Disclosure Act (CARD Act) that were implemented in August in on the November 22 edition of Economic Perspectives on KAZI 88.7 FM, 5:30 p.m. – 5:50 p.m.  Listen live online at kazifm.org.

This interview was orignally broadcast on August 16.

The new set of regulations includes the following protections:

  • The credit card company cannot assess a late fee of more than $25 unless one of the consumer’s last six payments was late, in which case the fee may go up to $35.  However, if the credit card company can demonstrate that the costs it incurred as a result of the late payments justified a higher fee, they are allowed to impose a higher penalty.
  • The issuer cannot charge a late payment fee that is more than the minimum payment.
  • When a charge exceeds the account’s credit line, an over-the-limit fee of more than the amount charged cannot be assessed.
  • The credit card company cannot charge a consumer an inactivity fee for not using their card.
  • Consumers can no longer be charged multiple penalty fees for the same transaction. For instance, both a late fee and an over-limit fee resulting from the same transaction cannot be charged.
  • The company must explain any increase in the card’s Annual Percentage Rate (APR).
  • If the APR is increased, the credit card company must re-evaluate the increase every six months, and if appropriate, reduce the rate within 45 days after completing the evaluation.

“As a result of the CARD Act, consumers have an added layer of protection related to their credit cards,” said Gail Cunningham, spokesperson for the NFCC.  “In addition to being familiar with these provisions, consumers need to open their credit card statements promptly, and read all inserts that accompany the monthly mailings.  These simple steps are a critical part of creating a financially stable life.”

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