The credit card industry has been on a rate-raising, fee-hiking, rule-writing rampage ever since Congress voted to ban its most abusive practices last spring.
But that aggravating snit fit is finally over.
Most of the Credit Card Accountability and Responsibility Act law’s most important new regulations take effect today.
Many of your credit cards most costly and infuriating practices — double-cycle billing, universal default, increasing rates on existing balances — are now prohibited.
(Click here for a rundown of the 8 good things the Credit CARD Act will do for consumers.)
Only a few final provisions — such as requiring cards to reduce interest rates for consumers with improving credit reports — remain to take effect Aug. 22.
Unfortunately, the banks are already hard at work on new and creative ways to make up the lost revenue.
(Click here to see our post Credit cards crank up abusive new fees.)
Among the new costs being foisted on credit card customers, and not covered by the new regulations, are:
- Annual fees. Banks are raising them on accounts that already have them and imposing them for the first time on accounts that don’t.
- Inactivity fees. Let a card sit for a year, and it may begin charging a $3 a month fee until you buy something with it.
- International transaction fees. The cost of making purchases in foreign currency is going up and the fee is being extended to items bought overseas even if the purchase was made in dollars.
- Balance-transfer and cash-advance fees. Minimum fees are going up and limits on much you could be charged (these fees are usually a percentage of amount transferred or borrowed) are being eliminated.