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The FED (Federal Reserve) just  created new laws  to regulate credit card companies from “unreasonable” late payment and penalty fees. The new rules also require issuers to “reconsider” interest rate hikes imposed since 2009. Millions of Americans are dealing with  thousands of dollars of credit card debt that  is suffocating  them in fees and interest payments.

These new rules  will help to solidify other credit card laws  that were signed into law by President Obama as the “Credit Card Accountability Responsibility Disclosure Act” and will take effect August 22, 2010.

“The new rules require that late payment and other penalty fees be assessed in a way that is fairer and generally less costly for consumers,” states Federal Reserve Governor Elizabeth A. Duke. “Card issuers must also re-evaluate recent interest-rate increases and, if appropriate, reduce the rate.” 

One of the main standards of the new regulations  is a top  in most late payment fees. Currently many credit card companies are charging $39 or more in late fees; but the latest  rules cap that fee at $25.

Another standard  is to stop  credit card companies from charging a fee that is bigger than the umbrage (ie a $5 late payment can only be assessed a $5 fee).

Companies  are also now prohibited from charging numerous  fees in response to  a single late payment or other single violation of terms; and “inactivity” fees for the non-use of cards is now banned completely.

One of the ways consumers had been getting around  such fees is through instant approval credit cards which usually do not have any fee system  .

While  the changes have received some cheers  , many more are stating that the changes
 don’t do enough to change the underlying problem; the huge quantity of credit card debt that Americans are trying to get out from under.

Paul Hollender from Bloomfield-based firm Corash & Hollender states, ”It’s taking away some of the most outrageous things that credit-card issuers are doing, but I think it’s not enough to stem the tide of impending bankruptcies.”