New Credit CARD And Gift Card Rules: Here's What they Mean For You
The final provisions of the CARD Act - the federal law designed to protect credit card users- are now in effect. I discussed what it means for you with CBS3, but we didn't have time for the gift card rules!
NEW RULES: WHAT THEY MEAN TO YOU
Credit Cards:
- Penalty fees are now capped at $25 (unless credit card users repeatedly pay late or break their card agreements in other ways)
- Late fees can't exceed your minimum payment amount
- Inactivity fees are illegal
- Companies have to re-evaluate rate hikes every 6 months.
Don't get too excited yet. Card companies collected $22.9 BILLION dollars in penalty fees in 2009, which they're not simply going to eat. New data shows that card companies are jacking up other fees to recover lost revenue.
- Balance transfers & Cash advances up 33%
- Annual fees up 18%
- Q2 Average interest rate 14.7% vs. 13.1% a year ago
- 5 yr expiration: if your gift card expires when there's still money on it, you can request a new card
- New-card fees: in the first year you get a gift card, only one fee can be imposed
- Disclosures: fees, and toll-free number and web site where you can go for more answers must be printed on the card after Jan 31, 2011
