March 15, 2010
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New CC Regs -- Fees & Penalties, Pt.3
Reasonable & legit fees, but more of them.The new CCARDA (Credit Card Accountability, Responsibility and Disclosure Act) does protect us from unreasonable and illegit credit card fees but it doesn't protect us from a swarm of new fees we've never heard of. New credit card fees just have to not be 'unreasonable and illegit'. By 'unreasonable', the new regulation mandates that the fee or penalty not exceed over 25% of the credit limit on the card. This is mainly to prevent scams to charge for worthless credit cards.
As far as new innovative ways to still sock it to the credit card consumer, we consumers should brace ourselves to see many new types of fees and penalties in the near future Some of them will be things like:
o Online purchases from foreign merchants using credit cards
o Routine services as paper credit card statements
o Extended warranties
o Inactivity fees
o Annual credit card fees
o Application feesMany of these fees are already showing up in other types of banking, like checking and savings accounts. My Chase business account requires I perform at least 6 debits per month or else I get socked with a $10.50 maintenance fee.
Further then this, surprise manipulations will be prohibited. No surprise changes that will throw your account into a tailspin. You must be given a minimum 45-day notice before major changes can be made to your account. You cannot be slammed with a new fee that will drive your account into overdraft or cause your monthly payment to be late. You must be given reasonable time to get your payment in. In the past, there have been too many instances to count where people received their statement so late they could not get their credit card payment in by the deadline.
The regs also require that your payment requirements (due date) will always fall on the same day of the month. Same for closing dates on the account. You will always know when to expect the closing date for your credit card account.