It seems like a long time since we’ve heard anything about the Credit CARD Act that was in the news last May, but it’s not over yet. The third wave of changes is about to take place, beginning August 22nd.
We know that it can be confusing to keep up with all of these new policies, so here’s what you need to know—and how it will affect one of the most important cards in your wallet!
Credit Card Companies Can Fine Us Outlandishly.
Credit card companies can slam us with tons of penalties for late payments, or even for not using our card enough! The punishment doesn’t even have to fit the crime, and our credit card company might hit us with a $39 fee for paying our $20 minimum payment a few days late. Furthermore, some sneaky companies charge their customers multiple fees for a single late payment.
In The Future, Fines Will Be Limited.
Under the new law, credit card penalties will be capped at $25 under most circumstances. Credit card companies also won’t be allowed to penalize their customers with fees that are higher than the customer’s original violation, so the most we can be charged for a late payment penalty is the amount of our minimum payment or $25, whichever is lower.
Card Abusers Are Still Out Of Luck.
“Chronic card abusers” who frequently miss their payments and rack up tons of fees, can still get hit with fees higher than $25, but we will avoid falling into that category anyway! Higher-than-normal fees are only more incentive to use our credit card responsibly and pay bills on time.
The Act Shouldn’t Affect Responsible Card Users.
Ideally, we shouldn’t even notice these changes. Since we pay all of our credit card bills on time, we should easily be able to steer clear of credit card penalties in the first place. Everyone makes mistakes, though, and the new policy offers a bit more forgiveness and protection if we do slip up on our usually stellar money management practices.