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You’ve heard all the talk about credit card reform.
In 2009, Congress finally passed the Credit Card Reform Act in an effort to protect consumers from predatory practices of credit card companies.
Now, many of the provisions of the Credit Card Act have been implemented. So here are some of the changes in how credit card issuers conduct business.
- No more inactivity fees can be levied.
- Only one fee or penalty can be charged per transaction (so no more “simultaneous” over-the-limit fees and late fees can be levied against your account)
- Gift cards issued after August 22 will be usable for a minimum of five years from the date of issuance (or the last time that funds were “loaded” onto the card).
- Gift card dormancy fees can only be assessed if the card is unused for a year.
- The maximum fee for a first time late payment is $25.
- The maximum fee for a second late payment is $35 – unless six or more months have passed since the first late payment; then the fee is capped at $25.
- Late payments cannot be more than the minimum payment due on a bill.
- If a credit card issuer hikes your interest rate, you must be notified at least 45 days in advance.
- If a credit card issuer hikes your interest rate, the rate must be reevaluated after six months to see if it can be dropped again.
Many of us have been waiting to see how all of these mandated changes will effect the credit card rewards programs.
After the bill was first passed, card companies were pretty proactive about making adjustments to their programs early, usually in the form of deep cuts to their rewards programs.
In the end however, only time will tell if the worst of these reward program “adjustments” are behind us.