The Consumer Protections Rules Limiting Credit Card Fees

A set of new rules puts forward federal reserve system on Wednesday,


which can prevent credit card vendor for charging consumers large penalty of fees because of their slight mistakes and can control the ability of credit card issuers charge a certain fees and higher interest rates. The issuers may also be required to re-evaluate the rate increases which are imposed since the beginning of the year before.

The new rules or changes will form part of the Card Act of Accountability, Responsibility and Disclosure and will be put into effect in February and come on top of consumer protection series.

There were some tactics that credit card companies have implemented for charging fees which even caused the most consumer scorn. For example, if the cardholders do not use their cards during a 12-month period, will be 'inactivity fee'. The inactivity fee is not a annual fees, which charged based on the frequency of use, while the annual fee often around $50 to $100 and are charged without considering how often the card is used. Another protection come from the new rules is that card companies can not charge a higher fee that than the amount of customer's transgression. For example, some card companies may charge $39 of late payment penalty, while the actual dollar amount of the transaction is only $20. So, according to the new rule, the issuers only charge a fee less than $20 and a single late payment or other account violation like going over the card's credit limit can only be charged penalty once.

Since Jan. 1, 2009, the card companies have been required to give reasons for any interest rate hikes. Though there is almost no indication to the card companies for how to determine the appropriate of increase charges, they still have to do so. And the credit card will become more transparent. However, even these rules are taken effect, banks will find new ways, for example in the form of new or increased fees to make up their lose and for the revenue.

How Much the Effect of Capping Credit Card Interest Rates?

A new law favored by two Democratic lawmakers yesterday. The law would set a new national cap on the interest rates for forbidding credit card companies from charging interest rates more than 16% , and to the cardholders who exceed a credit limit or make a late payment would be charged fees no more than $15.


College students who want to open credit card accounts also become much harder with the bill passed in May which banned certain fees. And, ahead of the implementation of the federal CARD Act, nearly all the major banks have concurred increased interest rates. It go against the consumer's interest with the increased interest rates by credit issuers. With this legislation, credit agencies have been restricted their greed for profits on all the American people, who paid for the mission.

It is no surprise that the bill met with vehement opposition from the financial services industry. Especially the representatives of South Dakota and Delaware, South Dakota is home to Citigroup’s credit-card division, while Delaware is home to the credit-card arms of Bank of America, HSBC, and JP Morgan Chase. Under the new bill, it become harder to get consumer credit, the economy of Delaware has taken a hit, employment rate of financial fell by 10 percentage points since 2007,while overall salary declined 25% accordingly. So, in order to attract credit card issuers to set up operations in the state, these two states repealed the terms of interest rates cap of the new law.

However, the effect is quite uncertain for the law to positive high or low credit card interest rates by capping credit card interest rates.

The Main Effects of the New Law to Credit Card Companies

Under the new law, the credit card company is required to give you 45 days written notice before raising the interest rate on exist card and list out the amount of time it would take a customer to pay off his balance for every bill. The statement will show you the ugly truth of the gimmicks that card companies have used to drive up profits.


The credit Card Act of Accountability, Responsibility and Disclosure of 2009 aimed at protecting consumers from sudden interest rate hikes, excessive fees and other moneymaking gimmicks may be only favor the wealthy. These regulations are leading all issuers like American Express Co. to the top of the credit food chain. The will race to use reward points to keep customers with top credit scores, while the excessive competition is never a good thing in any industry.


The average credit score of cardholders for American Express is 754, which is 32 points above the other counterparts. The borrowers with top credit scores, for example, Walt Serafin, who is the Biotechnology company manager and a cardholder of AmEx, used reward points from his top scores credit card paired with a holiday discount and purchase an Apple iPhone. While the borrowers with low credit scores were aimed at making up for lost revenue because of the new law. They may encounter new membership fees, difficulties applying for credit.


The Credit CARD Act also caused the issuers tight their lending standards, while a large numbers of card companies have already relaxed lending restrictions and a lot of customers get high consumer loans in the fourth quarter. While in the same period, many cardholders focus on trying to pay off their debt and the revolving consumer credit has been falling every month, it reached a low point and fall by 9.6%, 2009,showed by the Fed report.

The Recently Conditions of Consumer Credit Card

Consumer Credit Card's focus is to provide consumers with helpful information regarding credit cards and credit related issues. Consumers slashed their credit card debt levels by more than $1,600 in 2009, according to the latest Federal Reserve report on consumer credit, and experts say a down economy will continue to leave borrowers with a distaste for debt.


And recently, it brings a complex phase to the consumer credit during the first month of the year of the report from the Federal Reserve Board.

According to the Fed in January consumer credit in the form of credit cards with a 2.4 percent average rate of advance. Compared to December last year, overall consumer credit fell 2.2 percent. As a whole, it is showed in January, the outstanding loans amounted to $2.45 trillion U.S. dollars in consumer credit.

Based on the recent report from Federal, the auto loans and other kinds of no revolving debt came in at $1.59 trillion for January. The consumer credit seems to grow along with the No revolving credit growth, which showed rose at a 5% annual rate in January, compared to a 3.7 percent increase last month, and a 7.7 percent decline in November.

Though with the increase of no revolving credit, most consumers trying to pay off their balance in full. In fact, till last year, the revolving consumer credit of credit card companies has been falling every month, it reached a low point and fall by 9.6%, 2009,showed by the Fed report. Though, as it showed a drop in revolving consumer credit of 2.3%, seems not as drastic as previous declines of 12.9 percent in December and even 18.5 percent in November.

The decline of revolving consumer credit is a double-edged sword, it may suggest that there are more people paying off their credit debt while on the other side, it means the customers find it hard to pay off their credit card debt and the banks had to charge off of what is owned them.

New Information about Credit Card

The third quarterly report shows that Visa ( V - news - people ) recorded profits of $1.02 per share or $763 million. Compared with the same period last year of 10.9 billion, Visa with the Sum (volume or amount) of business transactions increase of 12 percentage points, which defeated the Street's call for 91 cents per share. The report also suggested that more customers are using the card, the number of cards people carrying a Visa brand rose by 5%.


The collect fees business model avoid the credit risk of Visa company. With solid earnings per share and improved operating revenue, Visa posted a healthy start to fiscal 2010, which make distance from its rival MasterCard.

Reported just after the Wednesday's closing bell rings, Visa's result is really positive, while followed by rival MasterCard's latest quarterly earnings, through investigation analysis, Thomson Reuters expect MasterCard's profit to jump 32% to $2.47 per share.

It is differ from banks and other lenders, Visa and MasterCard took the business model by allowing financial institution partners to issue their branded cards, in order to avoid credit risk. This model also helped both of them avoid the pitfalls of many other financial institution of competitors.

The issued new regulations that came into effect on Feb. 23 about the card issuers still exist a lot of influences and restrict an element. Shares of Visa fell .6% to $83.52. Based on other major credit card issuers, including Bank of America ( BAC - news - people ), Citigroup ( C - news - people ) and JPMorgan Chase ( JPM - news - people ) survey, the results were still negative, improved by credit card metrics, even with the challenges. Results were announced on Thursday shows that : shares of Visa declined 6% to $83.52,but gained 2.4% after hours. Shares of MasterCard down 2% to $247.58 but get back 1% in the extended project.


Raissa Zhou offers expert advice and great tips regarding all aspects concerning Credit Cards. Get the information you are seeking now by visiting Cash Back Reward Credit Cards.

To Determine If You Need a Business Credit Card or Not

So you recently started to do business, you know you should apply for a small business credit card ... ... you need (or even prepare) a small business credit card can be a major decision. Make sure you make the right people ask yourself these four questions.


You should ask yourself what kind of small business credit card is in the best interests of your company, you need to determine what type of business credit card will meet your needs best.

If you intend to pay your balance bill in full monthly, you should look at the business credit card offer rewards. However, because of their higher interest rates, rewards credit card is not a good choice if you intend to carry out a balance. And choose a low-interest credit card to replace may be much better.

Decide whether to apply for a small business credit card. If you are a small business owners, to determine what types of small business credit card with the best service to meet your needs are the key step for you to find business credit cards.

If you have been involved in business in less than six to twelve months, you may want to wait a bit before applying. However, if your business is out of the "first-year danger zone" you may indeed want to consider getting a credit card in your business's name to help your company's growth and prosperity.

If you have a good reputation, then you really have nothing to worry about. There will be a variety of small business credit cards available for you to choose from. However, if you have problems of credit, your options are limited, you may need to apply for secured credit card, until you can improve your credit rating.

How to Manage Your Bad Credit Card Well Enough

In this competitive credit market, it is quite easy to anyone get a credit card nowadays, especially the bad credit credit card. However, the biggest question is: If your current credit rating does not look good enough to make you a regular credit card, should you apply for a bad credit credit card? Are there any impact? How does the bad credit credit card work well for you?


Well, you must first be certain on your purpose of getting a bad credit credit card. Have you already used up of your current credit card. Did it become more expensive credit to support your lifestyle? Or are you getting a bad credit credit card with an aim to turn your bad credit report to an excellent one?

If you have no credit history or gone to bankruptcy, bad credit credit card can help you establish a good credit history or rebuild it. However, due to higher interest rates, you must be careful not to over spend money on your bad credit card. Then there will be only a relatively small fee, if you manage your credit card well enough and must be paid on time. As bad credit card companies report your repayment habits to the credit bureaus, good credit bureau records will lead to a good credit report. In this way, once your credit report have been maken you a regular credit card, then you can switch cards balance and enjoy the relatively low interest rates.

This guys, who provide you bad credit card, do know your credit card is poor, so they do not even trouble with credit checks - they just give you a card, send it to you. It is like to get a fresh start - but you can only accept it. Of course, the interest rate is higher, but that's just another reason to make your payments on time.