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Third Phase of Credit CARD Act Finally Arrives

Has it not felt like an eternity since President Obama first signed the Credit CARD Act into law? Here we are almost 15 months after the stroke of his pen, and we're still waiting for the final round of new credit card rules to take effect.

Fortunately, we don't have to wait much longer. Beginning August 22nd, here are five of the final key changes you should expect to see from your credit card companies:

1. No More Inactivity Fees

That's right—your credit issuer can no longer charge you a fee for not using your card enough!

2. $25 Max on Fees

Unless one of your payments was late during the previous six months, your credit card company cannot charge you a fee in excess of $25. If you have been late, they can still charge a fee as high as $35.

3. Late Fees Capped at Minimum Payment

In addition to the $25 cap on fees, late fees cannot exceed your minimum payment amount. So, if your minimum payment is only $15 and you miss the payment due date, your credit card company can't levy a late fee larger than $15.

Likewise, if you exceed your credit limit, you can't be charged an over-the-limit fee greater than the amount by which you exceeded your limit.

4. One-Fee Limit

Your credit card issuer can no longer charge multiple fees for a "single event or transaction that violates your cardholder agreement." So, if you make a late payment, you can only get slapped with one fee for your mistake.

5. More Rate Transparency

While it's not talked about as much as the new fee-related changes, rate transparency should be just as important in the minds of consumers. If your credit card's interest rate is increased, wouldn't you want to know exactly why? I know I would.

The new rules not only require credit card companies to tell you why your APR increased, but they also have to review and re-evaluate the increase every six months. For example, if your credit issuer reviews your account after a rate increase due to late payments and find you have paid your credit card bill on time for six consecutive months, they must lower your rate back to its previous level.

Of course, restricted fees are often replaced by new fees or uncommon ones that consumers haven't dealt with for years.  Have you noticed any new fees from your credit issuers lately?  If so, we'd love to hear about them in the comments section below.

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Joshua Heckathorn's picture

Joshua Heckathorn was President of Creditnet, is a credit expert and has been featured on CNNMoney, FOX Business, Yahoo Finance, The Street, and many other national publications during the past ten years.  He received a Bachelor of Science in Management (Finance) from Brigham Young University's Marriott School of Business and earned his MBA from Seattle University.

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