Wealth Finance

Beginning yesterday, the last leg of the Credit Card Accountability Responsibility and Disclosure (CARD) Act of 2009 went into effect. This last part regulates credit card fees and interest rate increases, and imposes new regulations on gift cards. Here’s a summary of what it regulates, from Defend Your Dollars, a site run by Consumers Union, the nonprofit publisher of Consumer Reports. Limits on the size of late fees: Credit card issuers will no longer be allowed to charge you a late payment fee that is larger than your minimum payment. Banks also cannot charge a late fee higher than $25 unless one of your last six payments has been late or if the bank can show that the costs associated with the late payment justify a higher fee. Ban on multiple penalty fees for single violations: You cannot be charged more than one penalty fee for a single violation of your credit card agreement. For example, you cannot be charged both a late fee and a returned payment fee based on a single botched payment. Ban on inactivity fees: Card issuers will no longer be allowed to charge you a fee for failing to use your account enough or for terminating your account. Your account can still be closed for inactivity by your card issuer. More information about why your rate is going up: Since August 2009, card issuers have been required to give 45 days notice before raising your interest rate on future purchases. Now they must notify you of the reason they are imposing a rate hike, such as market conditions or a reduced credit score. Interest rate increases must be re-evaluated: Interest rate increases dating back to January 1, 2009 and into the future must be periodically re-evaluated. When a card issuer raises your interest rate, it must review the increase every 6 months and reduce the rate in certain circumstances. No fees can be charged on gift cards for 12 months: But, if a gift card remains unused for 12 months, gift card issuers can charge one fee per month. There are no limits on the amount of the fee and you can still be charged a one-time fee for purchasing a gift card. Gift cards cannot expire before five years.—Chris Fichera

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