A new set of rules governing how credit card companies charge their customers may have an impact on consumers’ credit ratings. Buyers with bad credit should take note of these changes in order to possibly improve their score.
According to WBRC in Alabama, the new rules will go into effect on August 22nd as part of the Credit Card Accountability, Responsibility and Disclosure, or CARD, Act that was signed into law in 2009. This multi-tiered bill is designed to provide new protections for consumers while restricting some of the practices of credit card companies.
Many consumers with a credit card know that there are many fees for all sorts of situations. However, the new bill has reduced the charges for late fees to $25 maximum. In addition, companies can no longer charge multiple fees for the same reason- like a late fee for every day or week a bill is overdue.
There are also no longer any inactivity fees. One good practice for card holders looking to improve their bad credit is to open multiple cards but only use some of them sparingly and for small purchases in order to build their credit score. Although credit card companies still have the right to close an account, they can no longer charge consumers for not using the card.
Finally, there are new restrictions on raising interest fees. Customers who continually make their payments on time won’t be subject to raised fees, as the new rules govern that card companies must explain why they are raising the rate. In addition, customers who have previously made late payments but make good payments after six months have the right to have their rates lowered.