The Office of Thrift Supervision, the Federal Reserve, and the National Credit Union Administration announced new rules for credit cards on Thursday, Dec 18. The rules were coordinated so banks, thrifts, and credit unions would all have the same rules. Some opponents claim the rules will hurt the economy by reducing the amount of credit available, but the new rules don’t go into effect until July 2010. Opponents say credit card providers will raise rates and cut lines of credit before then. Consumer advocates worry the rules do not do enough or go into effect fast enough.
Some highlights of the new rules are:
- Interest can only be raised on new charges, not on old balances. Credit card lenders will have to apply any payment to the part of the balance with the highest interest rate
- No late fees or penalties for 30 days
- Credit Cards must give 45 days advanced notice of rules changes, or imposing penalties and major changes must be announced in bold text
The Federal Reserve press release is here.
