FOR IMMEDIATE RELEASE
ICBA Wants Consumers to Be Aware of New Rules for Credit Cards
Washington, D.C. (August 9, 2010)—The Independent Community Bankers of America (ICBA) and the nation’s nearly 8,000 community banks want consumers to be aware of new rules governing penalty fees and rate increases on personal credit cards that will go into effect August 22, 2010. The changes do not apply to traditional corporate cards.
“These new rules are meant to protect consumers, but the best protection is to be well informed. Community bankers want our customers to have the information they need to manage their credit wisely and to make sound financial decisions,” said Jim MacPhee, ICBA chairman and CEO of Kalamazoo County State Bank in Schoolcraft, Mich. “If you have any questions about how the new rules will affect you, the best person to talk to is your community banker.”
Beginning August 22nd, your credit card provider may only charge reasonable penalty fees. Specifically, you cannot be charged:
- A late payment fee of more than $25, unless:
- one of your last six payments was late, in which case your fee may be up to $35; or
- the costs incurred as a result of late payments justify a higher fee.
- A late payment fee that is greater than your minimum payment. For example, if your minimum payment is $20, your late payment fee cannot be more than $20.
- More than one fee for a single event or transaction. For example, you cannot be charged more than one fee for a single late payment.
- Inactivity fees, such as fees for not using your card.
According to the new rules on rate increases, if your credit card provider raises your Annual Percentage Rate (APR) , it must tell you why. It must re-evaluate that rate increase every six months and it must reduce your rate within 45 days after completing the evaluation, if appropriate.
To learn more about the new credit card rules, visit the Federal Reserve’s website. For more information about community banks, visit www.icba.org. To find a community bank, visit ICBA’s community bank locator by clicking here.