As many of you have heard by now, the Federal Reserve Board approved several new rules providing credit card protection from high and often unreasonable late and penalty fees. The new rules, which will go info effect on August 22, 2010, are meant to ensure that these fees are less costly and more fair for consumers.
The new rules are an amendment of Regulation Z, which implemented the older consumer credit protections established in the Truth of Lending Act of 1968. Since these rules are over 40 years old, the rights they provided are much more limited in comparison to the new amendments.
For example under Regulation Z a late fee payment would be the same amount for a $30 minimum payment as it would be for a much higher payment such as a $70 minimum payment. Under the new rules; however, credit card companies can charge a maximum late fee of $25 with only a few exceptions.
Here is a breakdown of the rules that you will want to know about: