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New Credit Card Rules Protect Consumers

We can certainly live without credit cards, but for a very long time we were fooled into thinking that wasn't the case. Credit card companies were able to get away with a lot during that time and weren't always regulated in ways that would protect consumers. Yesterday, the Fed ruled on a set of new regulations that are obviously consumer-oriented, but credit card companies won't have to act accordingly until 2010. According to the AP, carriers will be prohibited from the following under the new rules.

  • Placing unfair time constraints on payments. A payment could not be deemed late unless the borrower is given a reasonable period of time, such as 21 days, to pay.
  • Placing too-high fees for exceeding the credit limit solely because of a hold placed on the account.
  • Unfairly computing balances in a computing tactic known as double-cycle billing.
  • Unfairly adding security deposits and fees for issuing credit or making it available.
  • Making deceptive offers of credit.

To see what else credit card companies will be accountable for under the new rules,


  • Credit card lenders will be required to apply any payment above the minimum to the part of the balance with the highest interest rate.
  • The so-called subprime cards for people with low credit scores typically have no more than a $500 credit limit but require a large upfront fee.
  • The rules cap that fee at 50 percent of the credit limit and allow the cardholder to pay off the initial balance over a year, not immediately.


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