Rules issued by the Federal Reserve Board place several limitations on the ability of credit card companies to charge fees and issue credit cards. These restrictions, which went into affect two years ago, impose more fairness on credit card billing. A summary of some of these limitations is following:
- Interest rates cannot generally increase in the first year after a credit card account is opened and increases to the interest rate on new transactions after the first year can only increase after 45 days notice has been provided to the debtor.
- Credit card companies are required to post their standard card agreements on their websites so consumers have access to them.
- Credit card payments that exceed the minimum payment required have to be applied to the account balance with the highest interest rate.
- Credit cards can’t be issued to people under the age of 21 unless the debtor shows an ability to pay or has a cosigner over the age of 21. There are also restrictions placed on companies trying to market credit cards to college students.
- Each credit card statement has to include a disclosure showing the amount of time and the total cost of paying the account balance in full by only making the minimum payment required.
- The statements must also disclose what the monthly payment needs to be if the debtor wants to pay the balance in full within 36 months.
- Credit card companies have to get the express permission of a consumer before they can charge a fee for transactions that exceed credit limits. There are also limitations on when over-the-limit fees can be charged.
These and other restrictions on credit card companies will hopefully put an end to some of the more unfair methods companies previously used to make money off credit card holders.