Calling all credit card users- New credit card rules begin

By the time you are reading this, rules for credit cards will have changed. “Newly purchased gift cards won't expire as quickly, and late fees on credit card payments won't be as punishing."

“The final stage of consumer protections signed into law this year go into effect Sunday. Yet they only curb select practices; other fees and charges still abound.”

Here are some of the new safeguards, but remember, you can still get burned.

Penalty fees:

New protection:

Fees for late payments and other transgressions will be capped to the amount of the violation, up to $25. And, a single violation can no longer result in more than one fee.

Gaps to watch: Technically, there isn't an outright ban on penalty fees higher than $25.

“There aren't any caps on other charges. And not surprisingly, many issuers hiked fees for balance transfers, foreign transactions and cash advances in the past year.”

Rate hikes:
New protection:

“Banks must review a rate hike every six months to decide whether the increase is still warranted. If the factors that prompted the hike are no longer applicable, the rate must be lowered.”

This rule applies to hikes dating to Jan. 1 of last year, when banks began raising rates in anticipation of the new regulations.

Gaps to watch: 

“Even if a bank finds that a rate should be lowered, the reduction doesn't have to restore the previous interest rate.”

Gift cards:

Expiration dates

New protection:

“Gift cards issued after Aug. 22 must have expiration dates that are at least five years from their date of purchase.”

Gap to watch:

“The rule doesn't apply to certain gift cards, such as those issued as part of a rewards or loyalty program.”

Inactivity and service fees:

New protection:

“Such fees can only be charged if the card hasn't been used for at least one year. After that, only one fee can be charged each month.”

Gaps to watch:

“There's no cap on inactivity or service fees. So even though you can only be assessed one monthly fee, it could quickly eat away at a card's value if it's not used.”

It's a first step, some one say a small one, others a big one, in giving consumers more protection.  Let's see what Congress does next.

Read the Associated Press article.

For your next title order or 

if you have questions about what you see here, contact 

Stephen M. Flatow 

Vested Title Inc. 

648 Newark Avenue, P.O. Box 6453, 

Jersey City, NJ 07306 

Tel 201-656-9220 - Fax 201-656-4506 

E-mail vti@vested.com - www.vested.com

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