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Wednesday, August 25, 2010

New Credit Card Rules Imposed in U.S. Should Be Implemented Here in Singapore Too

The United States recently imposed a new set of Credit Card rules protecting consumers, making sure big banks are not allowed to take advantage of customers with unfair fees, rate hikes, and a lack of clear information.

Some of the key new rules set are (lifted from here)

  • Limits on the size of late fees: Credit card issuers will no longer be allowed to charge you a late payment fee that is larger than your minimum payment. Banks also cannot charge a late fee higher than $25 unless one of your last six payments has been late or if the bank can show that the costs associated with the late payment justify a higher fee.

  • Ban on multiple penalty fees for single violations: You cannot be charged more than one penalty fee for a single violation of your credit card agreement. For example, you cannot be charged both a late fee and a returned payment fee based on a single botched payment.

  • Ban on inactivity fees: Card issuers will no longer be allowed to charge you a fee for failing to use your account enough or for terminating your account. Your account can still be closed for inactivity by your card issuer.

  • More information about why your rate is going up: Since August 2009, card issuers have been required to give 45 days notice before raising your interest rate on future purchases. Now they must notify you of the reason they are imposing a rate hike, such as market conditions or a reduced credit score.

Such never before consumer protection rules should also considered by legislation of other countries and implemented everywhere.

How New Credit Card Rules Help You [via]

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